Powell Excerpt: Loss From Shutdown Will Be Regained In Q2

     WASHINGTON (MN) - 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: I am struggling a little bit to understand what has changed since we

sat here with you six weeks ago. You said today you think inflation would be the

reason the fed would continue to raise rates. Has the inflation outlook shift

Thad dramatically in the last six weeks?  Can you speak to why you have moved

from a posture to say we expect to keep raising rates to a posture of standing

still?  

Powell: I point to a couple of things. 

     First, the narrative of slowing global growth continues, if you will. The

incoming data have shown more of that. We've seen that both in China and in

western Europe. And so that's an important -- that has important implications

for us. And that story, let's just say it continues.

     In addition, I mean, I think important, possibly less important now,

probably less important now but has been the shutdown, which will leave some

sort of imprint on first quarter GEP.  We don't know the ultimate resolution of

it. If that's all it is and the shutdown is gone and there isn't another

shutdown, then we'll get most of that back in the second period. Second quarter.

     In addition, you know, you have to look back, financial conditions began to

tighten in the fourth quarter and they now have persisted and remain tighter.

Significantly tighter, let's say, than they were.  That's something we have to

take in to account as well.

    So that's where we are

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

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