MNI TRANSCRIPT: Powell on Patience, Not Changing Rate Guidance

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

Federal Reserve Chairman Jerome Powell's press conference Wednesday:

     Q: I'm wondering what you would say to savers who are hurt by very low

interest rates, and maybe going into investments maybe in the stock market that

aren't so great for them, and also I'm wondering if you can give us any more of

a clue as to how long you think we are going to have interest rates near zero.

     A: So, we think that low interest rates affect the economy through a number

of channels, in a positive way. Lower interest rates support economic activity

through channels that, overall through channels that we understand reasonably

well. They make it cheaper to borrow, they drive your costs of borrowing down.

They do raise asset prices, including the value of your home, if your saver owns

a home or has 401K savers will benefit from that. But for people who are really

just relying on their bank savings account earnings, you are not going to

benefit from low interest rates. But we have to look out for the overall

economy, low interest rates support employment. They support economic activity.

Those are our mandates. I think for the overall good of the question, low

interest rates are a good thing. And it does not say they are good for every

single person. But that shouldn't stop us from doing what we think is good for

the whole. 

     In terms of how low, I don't want to speculate, we will turn to questions

like that soon enough, but in terms of how long we will stay and under what

conditions we will stay at the effective lower bound, those are just exactly the

things we are thinking about, right now we like the place we are. We have said

that we will keep our rates where they are until we are confident that the

economy has weathered the effects of the outbreak and is on track to achieve our

goals. So that is where we are. We are not changing that guidance today. But it

will be, that means we are going to be very patient, that means we are not going

to be in any hurry to move rates up.

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

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