MNI TRANSCRIPT: Powell on Trade Uncertainty

     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: Earlier this year, or actually in September, the governor's board put

out a research paper looking to quantify trade uncertainty and suggested it

could drag through the business investment channel on growth, as much as a

percentage point over the next year. 

      How much confidence do you have in The Fed's ability to estimate the real

effects of trade uncertainty?  And if you have confidence in that paper, it'd

seem to suggest a sort of, more aggressive path than the one you've chosen. 

     A: To provide context, fed economists do research all the time, it's

generally very high quality.  It's their research, it's not an official finding

of the Federal Reserve Board or the Federal Reserve System.  It's just, and by

the way, they put it out for public review.  There are metrics to see all of it,

their whole work is exposed to critique by the whole profession. 

   It's a great tradition that we have.  And... you know... with this particular

piece of work, it, it went after measuring trade policy uncertainty, concerning

the threat of more tariffs and looked deeply at the data to address the effects

on output.  I'd say directly answering your question, there's real uncertainty

around these effects.  It's that $22 trillion economy to try to isolate the

effects of certain things is very challenging.  But... we do the best we can. 

   This piece of research found significant effects, frankly, that's consistent

with a number of other research projects that economists have undertaken.  It's

consistent with what we've been hearing in the beige book. 

   I think if you take a step back from that, we feel that trade uncertainty is

having an effect.  You see it in weak business investment, weak exports, hard to

quantify it, precisely, though. 

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

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