Powell Excerpt: Taking Time On Balance Sheet Plans

     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: Mr. Chairman, did the Committee discuss an actual change to the

run-off policy or the run off schedule right now?  If so, is that under

consideration right now and when might we know?  The second thing is, I have to

nail down this thing. You guys, fed folks, keep mentioning the market average or

the market outlook for the sides of the balance sheet. Are you endorsing the

market average which is 3.5 trillion?  If you are not endorsing it, why do you

keep mentioning it? 

Powell: Okay. So today I'm here to talk about decisions and also discussions

about decisions that haven't been made. So we're talking about the ladder thing.

Discussions. So I can't get ahead of where decisions are.

     So the Committee is -- what we're looking to do is create a whole plan that

will bring us to our goal, our longer run goal, which is a balance sheet no

larger than it needs to be for us to efficiently conduct monetary policy.  But

to do so, in a way that doesn't put your goals at risk or resolve in unnecessary

market turmoil. So there are a lot of pieces to that 

     And we've learned over time when designing these plans, like, for example,

the original normalization plan, it's good to take your time, let the best ideas

rise to the top, let them stand the test of time and argument, and then move

when you are really comfortable with what you've got, and when you feel you can

communicate it clearly. So I don't want to get ahead of that process today.

     So we discussed there are a number of pieces to that puzzle. There are

several different pieces. I think they're coming. I'm very pleased at the

progress we've made. And, you know, the piece that you mentioned is something

that is in those discussions.  That's the first question 

     I'm not going to give our estimate or ratify anybody else's statement of

what the equilibrium balance sheet is. There are estimates out there but I'm not

at a point where I am going to give out numbers on that.  But there are

estimates, and I think they're consistent with what I said broadly speaking. 

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

[TOPICS: MMUFE$,M$U$$$]