Powell Excerpt:Have Not Made Decision On Bal Sheet Composition

     WASHINGTON (MNI) - The following is a response of Federal Reserve Chairman

Jerome Powell to a question from a reporter at his press conference following

Wednesday's Federal Open Market Committee meeting.

Question: The Fed has been allowing the average maturity of securities in its

bond portfolio to lengthen.  Is this aimed at consciously, aimed at flattening

the yield curve?  And is that going to be part of the Fed's longer run balance

sheet strategy?  And if flattening the yield curve is a conscious long-term

strategy, are you concerned about the side effect of the  heightening concerns

about a flatter or inverted yield curve being a harbinger of recession.

Powell: The basic answer to the question is no.  We are, the decision about the

maturity composition of the fed's balance sheet in the longer run lies ahead of

us.  We have not made that decision.  We haven't begun to have the serious

series of discussions over a series of meetings to grapple with that.  That I

think will be something we turn to reasonably soon.  But I think it will take

some time.  It is a consequential decision and one that needs some thought.  We

have had a lot of balance sheet discussions as I mentioned over the last four

meetings, but this is the next big one, big decision that we will face.  I think

we are not going to be rushed to resolve it but we will turn to it soon.

--MNI Washington Bureau; +1 (973) 494-2611; email: harrison.clarke@marketnews.com

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