MNI TRANSCRIPT: Powell on "Material Reassessment"

     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: I want to ask the only change in the statement was a drop in the

reference to uncertainties around the economy. You seem confident or it implies

there is a lot of confidence that those uncertainties have gone away. What

caused you to make that change for this statement, what were you looking at?

     A: We did actually, if you look at the statement, you will notice that we

did call out global developments and muted inflation pressures later in the

statement. Why did we do that? Those are things that we have been monitoring all

year. We have put now in place policies that we think are appropriate to address

those things. So we are not revisiting that. But those are key things, and they

haven't gone away. We thought it was appropriate to mention them there. Still

subject to the idea that for us to change our stance, we would want to see a

material reassessment of the outlook.

     Q: To follow up, on the material reassessment aspect, are you worried that

that has set too high a bar for potential cuts next year, we were talking about

rate hikes but no fed policymaker foresees cuts next year. Some economists do.

     A: One thing that we are mindful of is that we cut rates three times since

July. That is 75 basis points worth of cuts. We do believe that monetary policy

operates with long and variable lags and that it will take some time before the

full effects of those actions are seen in the economy. That will take some time.

That is one reason to hold back and wait. We think we took strong measures, in

fact, if you look at more broadly at the treasury yield curve, it has moved more

than 75 basis points. So you have had quite a significant move in the direction

of higher accommodation. In terms of what is material at the end of the day, I

would say whether or not a change in the outlook merits a policy response will

be a collective judgment of the FOMC. There isn't any single factor that will

determine our decisions. We will look at a full range of data and other

information bearing on the economic outlook.

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

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