MNI TRANSCRIPT: Powell on Trade, Insurance Cut

     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 follow up on that. Would you say we're -- you guys have gotten

into a new regime here? This is an insurance cut and not a data-dependent cut?

Are we now more in the realm of watching headlines of trade talks than we are

watching unemployment rate and inflation numbers and growth numbers? How do we

know what you're going to do next and why now in this new regime? 

     A: I gave three reasons for what we did -- that is to ensure against

downside risks to the outlook from weak global growth and trade tensions. That

is a risk management point. And that is a bit of insurance. But we also feel

like weak global growth and trade tensions are having an effect on the U.S.

economy. You see it now. In second quarter you see weak investment, you see weak

manufacturing. So, support demand for it there. And also to support return of

inflation to 2%. But there is definitely an insurance aspect of it. Trade is

unusual. There isn't a lot of experience in responding to global trade tensions.

So it is something that we haven't faced before and that we're learning by

doing. It's not exactly the same as watching global growth where you see growth

weakening, you see central banks and governments responding with fiscal policy,

you see a business cycle. With trade tensions, which do seem to be having a

significant effect on financial market conditions and on the economy, they

evolve in a different way. And we have to follow them. And by the way, I want to

be clear, we play no role in evaluating trade policies other than as trade

policy uncertainty has an effect on the U.S. economy in the short and medium

term. We're not criticizing trade policy. That's not our job. 

--MNI Washington Bureau; tel: +1 202-371-2121; email: kevin.kastner@marketnews.com

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