MNI TRANSCRIPT: Powell on Standing Repo Facility

     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: Where do discussions stand on standing repo, that was great, and the

other thing is on the standing repo facility, and then on the purchases, the

treasury bill purchases, as you enter this new regime later in the second

quarter or later in the year, will there be pre-set amounts like you're doing

now or that will be something people will have to intuit and figure it out as we

go along.

     A: I'll go in reverse order, when we make decisions about the steps we take

in the adjustment process that I described in some length, we'll be making them

as early and transparent as we can, and specifically, but we're not at that

stage, it's January, and we're several months away from that. In terms of the

standing repo facility, as I mentioned, I guess, in my answer to an earlier

question, there may well be a role for repo in this system, even after we're at

an ample reserves level. Now, we haven't decided what that role is. We have not

decided -- we haven't at all made a decision on the standing repo facility.

We've had a couple of discussions about it, as you know, back in June and

October, and there is a range of views. We're going to return, I would say,

fairly soon to this question. And I think it was wise to wait because we're

still getting a better sense of what that -- what that world looks like and, you

know, it's really going to be a question of how useful will it be, what will be

the costs and benefits. My thinking is that we will return to that fairly soon,

and I wouldn't assume a decision one way or the other. Really, we haven't made

one because we haven't had to, and I think when you delay, you get more

information by waiting, it's good to wait. We don't have urgency to make that

decision because we're still trying to find that sort of stable equilibrium

where we're in an ample reserves regime.

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

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