MNI TRANSCRIPT: Powell on Lower Capital Costs

     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: There's a perception that in this case the Fed is a hammer in search of

a nail. The latest consumer spending reports, as you suggested, don't seem to

show any kind of demand problem in the U.S. When you look at mortgage rates,

auto lending rates, they've all come down. And so I'm wondering exactly what

problem lower capital costs will solve. 

     A: So, you're absolutely right. The performance of the economy has been

reasonably good. The position of the economy is as close to our objectives as

it's been in a long time. And the outlook is also good. What we've been

monitoring since the beginning of the year is effectively downside risks to that

outlook, from weakening global growth -- and we see that everywhere -- weak

manufacturing, weak global growth, now particularly in the European union and

China. In addition, we see trade policy developments which at times have been

disruptive and then less so, and also inflation running below target. So we see

those as threats to what is clearly a favorable outlook. And we see this action

as designed to support them and keep that outlook favorable. And frankly, it is

a continuation of what we've been doing all year to provide more support against

those very same risks. 

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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