MNI TRANSCRIPT: Powell on Risk

     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: 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: brooke.migdon@marketnews.com

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