MNI TRANSCRIPT: Powell on Low Inflation Expectation

     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: Given this sustained level of low inflation even in this country, do you

think -- there seems to be a higher possibility that lower expected -- lower

inflation expectation will remain going forward. Do you think a Japan-like

situation or Japan (inaudible) of chronically low inflation and interest rates

the U.S. is getting trapped by the Japanification of this situation? Do you

think so?

     A: So we, of course, have watched the situation in Japan and now the

situation in Europe and we note that there are significant disinflationary

pressures around the world. If we look at our current inflation performance it

hasn't been anything like what we seen in those other places. But we don't --

again we don't think we are exempt from those pressures. And we are therefore

strongly committed to having inflation expectations anchored at level that is

consistent with a symmetric 2% inflation objective. That's what we are committed

to. We take the risk very seriously. It is not -- the risk is not that inflation

might run a couple tenths below 2%. Very hard to get off. One inflation

expectations start sliding down inflation moves down you have less interest

rates move down as well. Because there is inflation component in interest rates

and we think the right thing to do is to do what we can now to hold and really

move inflation expectations up so that they are squarely and firmly on cored a

the a level that consistent with 2% inflation.

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

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