MNI TRANSCRIPT: Powell on Inflation Target

     WASHINGTON (MNI) - The following is the portion of a transcript from

Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting

Wednesday:

     Q: Chairman Powell, many people seem worried that the framework that you

guys are working on is going to be the, the results are going to be less rather

than more. People keep coming back and saying, why, asking why you took off like

a 4 percent inflation rate off the table, even when it started, I mean, as you

said, if going around the country for all the listen events, I don't think I

heard anybody worry about a 4 percent inflation rate or think that higher

inflation rate was going to be a problem. Where does that concern come from? Is

it members of congress that have said this?

     A: No. Let me say, we have been working on this all year. We are just at

the stage where we have had a interesting discussion about the various tools

that we have at the October meeting, at this meeting we talked about the way

monetary policy affects different groups in the economy. So we talked about the

fed listens events and some very interesting research. We are just getting to

the stage where we are looking at conclusions, what do we take away from all

this. Those things, many of those things would wind up as changes, if you will,

modifications to the statement of longer run goals and monetary policy strategy.

That process will take until the middle of the year, but we want to approach it

thoroughly and carefully. That is in effect our framework document. I wouldn't

prejudge, no one, I believe we will be able to reach a successful conclusion,

and make meaningful improvements. I do. In terms of 4 percent, it's premature

for people to be saying that this isn't going anywhere. If you define going

anywhere as a 4 percent inflation target, let me talk about the 4 percent

inflation target. I'll go back to the point that just saying words is not itself

credible. If you said we are raising the inflation target to 4, what would be

the effect of that? Where is the credibility in that really? You haven't been

able to get it to 2. So I think you need to lower your sights a little bit. I

think, is 4 percent, you have to ask the question, is that really price

stability? Is that really price stability? Is that within our legal mandate?

It's a fair question. I think, I'd like for this review to come out with very, a

set of positive results, meaningful improvements. It doesn't mean it has to

solve every problem going forward. We want to have this be a successful exercise

where we meaningfully improve our monetary policy framework. These things don't

tend to move in a lurchy way, they tend to evolve. But, and if we do this, in a

few years again and again, things like that, then at least we are moving in a

good direction and I think we will be. I'm confident we will be.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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