MNI TRANSCRIPT: Powell Says Economic Path Depends on Pandemic

     WASHINGTON (MNI) - The following is the portion of a transcript from

Federal Reserve Chairman Jerome Powell's press conference on Wednesday:

     Q: I want to ask about the economic projections, and I realized these are

more of an educated guess at this point. I guess the committee sees a large

output gap the next two years, and yet, the committee did not take any steps

today to reinforce your forward guidance. My questions are, first, what are you

hoping to learn by waiting? Second, how might that change your response? Third,

how close is the committee to reaching a decision on a more concrete forward

guidance and whether yield caps might reinforce that guidance?

     A: So first, I would say that we think that monetary policy is

well-conditioned to support the economy in this challenging time. If we didn't

think that, of course, we would chase our policy now. We lowered our policy rate

very quickly, more quickly than others TOOV effective lower bound and we will

keep it there until the economy has weathered the effects of the virus and is on

track to achieve our goals. You see in the dot plot, as I think you pointed out,

overwhelmingly FOC participants expect no rate increase at least through 2022,

and if you look Atsur VAs of forecasters and market participants, financial

market prices, et cetera, those also appropriately effect a long spell of rates

at a lower bound. The first thing is monetary policy is in a good place and well

understood in the markets. Secondly, we have taken strong measures to support

the flow of credit in the economy, as I mentioned and we continue asset prices

in coming months at a relatively high-level. For all the reasons we feel like

policy's now in a good place. As we look ahead, the path ahead for the economy

is highly uncertain and continues to depend to a significant degree on the path

of the pandemic. At this meeting what we did is what we mentioned. We looked in

some depth at forward guidance and asset purchases, and we looked carefully at

those. We also received a briefing on the historical experience with yield curve

control. We'll continue those discussions in upcoming meetings and evaluate the

stance and communications as more information about the trajectory of the

economy becomes available. I would just say in temples of what we're looking

for, we expect a better understanding of the economy's trajectory and how to

best deploy the tools to achieve those goals. That's what we're looking to

achieve and actively on work on that.

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

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