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WASHINGTON (MNI) - The following is the portion of a transcript from
Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting
Q: You just said that the risk to the outlook are moving in a positive
direction. I'm wondering if you could specify is that on trade or other matters?
This morning we obviously learned that we have now had two quarters of
contracting business investment which would seem to be moving in the outlook in
the other direction.
A: So in terms of risk what I was referring to there the principal risks
that we have been monitoring have been slowly global growth and trade policy
developments as well as muted inflation pressure. I was referring to there to
trade developments. We have that phase 1 potential agreement with China which if
signed and put in to effect could have the effect of reducing trade tensions and
producing uncertainty. And that would bode well we think for business confidence
and perhaps activity over time. So that has the potential for being improvement
in the risk picture. Brexit I would say as well it appears that the risk of a --
of a no deal Brexit seems to have materially declined. Think in both situations
there is plenty of risk left but I would have to say the risks seem to have
subsided. You ask about business investment. Business sechlt has been weak.
Today's reading was weak as well and it was broad across equipment and other
parts of the bsh all parts of business fixed investment were weak. That's
consistent with what we have seen. That's the economy we have had this year.
What we have this is an economy where the consumer is really driving growth and,
you know, personal consumption expend turs were also 3% in this quarter. So
overall we see the economy as having been resilient to the winds that have been
blowing this year.
Q: Can I follow up quickly? There is this concern that I sometimes hear
that with business, businesses have cut investment and are they going to turn
around and cut employment. Sort of if they continue to be concerned. Can you
give a sense of how the committee is thinking through that possibility?
A: So that's a risk that we have been monitoring but we don't see it. We
don't see rising initial claim. The risk you mention of the weakness in the
manufacturing export and investment business investment parts of the economy
getting in to the consumer side, we don't see that. What we continue to see is
good job creation, unemployment has declined again in the household survey is
now at a 50 year low. Has been at very close to 50 year lows for 18 months now.
So it is a very positive. The consumer facing companies that we talk to in our
vast network of contacts, report, you know, that consumers are doing well and
are focused on the good job market and rising incomes and that's their principal
focus. So that is the thing that's pushing the economy forward and it doesn't
seem to have been affected so far by weakness in the other areas.
--MNI Washington Bureau; +1 202 371 2121; email: firstname.lastname@example.org