Q&A Concludes, Powell Stresses Inflation Overshoots Won't Be "Large"

Q: Re how Fed is helping commercial real estate sector

A: As Mnuchin mentioned the other day, our facilites are broad-based and not so much targeting any single sector. CRE benefits from several of Fed's existing facilities; the TALF takes commercial securities and SBA he purchases; Main Street helps businesses pay their rent; CMBS spreads have tightened. We're still looking at it, may be that further support for CRE requires further action from Congress.

Q: What would you say to average Americans re running inflation overshoots.

A: "It's intuitive that high inflation is a bad thing. It's less intuitive that inflation can be too low... inflation that's too low will mean that interest rates are lower. There's an expectation of future inflation that's built into every interest rate and to the extent inflation gets lower and lower, interest rates get lower and lower and then the Fed will have less room to cut rates to support the economy. This isn't some idle academic theory. This is what's happening all over the world."

We're not looking to have high inflation; we want it to average 2%; these won't be large overshoots and they won't be permanent but to help anchor inflation expectations at 2% so yes, it's a challenging concept for a lot of people." But the economic importance of it is large and those are the people we're serving and we serve them best if we can actually achieve inflation.