Powell Q&A begins: -Q: Can you explain your.....>

FED: Powell Q&A begins:

-Q: Can you explain your inflation forecasts. Inflation doesn't really

accelerate - it's faint and nonexistent. Your policy lever is not really

impacting prices at all.

A: Inflation has gone weaker over the years as the labour market/inflation

relationship has weakened. This means you need to keep policy accommodative. The

relationship between slack and economy has been weak, much lower than it used to

be. But it's still there.

- Q: Is the 1995/1998 analogy still appropriate in this situation? Will you take

rate cuts back as Fed did then?

A: Then, the economy needed slightly more accommodative policy but economy

wasn't going into recession. That's the same. What's different is structural

characteristics in the economy, particularly around inflation, which is barely

moving up despite unemployment at 50-yr lows. So need for rate increases is

less. We've learned that unemployment can be at low levels without upward

inflation pressures. Was quite different in 1990s.