MNI TRANSCRIPT: Powell on Yield Curve

     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: And the inverted yield curve that we hear is the bond market signalling

recession -- what do you -- is that -- so... that's not pertinent to you?

     A: No... we do -- we monitor the yield curve carefully, along with a large

wide range of financial conditions. We don't... so... the -- it's not, there's

no one thing that is dispositive among all financial conditions. The yield curve

is something that we follow carefully. And... again... based on our assessment

of all the data, we still think it's a positive outlook. The thing -- so... to

talk about the current situation... you see -- you saw the -- you saw the

long-term rates move down, a whole lot and then retrace 2/3 of that move in the

space of a few days. So... what really matters for all financial conditions,

generally is when there are changes, material changes that are sustained for a

period of time. So... but, why are long-term rates low? There can be a signal

about expectations about growth there, for sure, but can be low term premiums,

for example... just -- it can just be that there's this large quantity of

negative yielding and very low yielding sovereign debt around the world.

Inevitably, that's exerting pressure on U.S. sovereign rates, without

necessarily having an independent signal, nonetheless, that's a signal about

weak global growth, probably, and weak global growth would affect us. Global

capital markets and the global economy are quite integrated. This is something

-- we won't be dismissive about the yield curve, but... I think you can tell, on

the, on the committee, there's a range of views. There's some who are very

focused on the yield curve, others, not so much, from my perspective, you watch

it carefully and... you know... I think you need to be asking yourself a lot of

questions. If the yield curve isn't good, why that is and how long that's

sustained.

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

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