- Q: You discussed external headwinds now.......>

FED: - Q: You discussed external headwinds now easier, how is domestic outlook

impacted?

- A: Consumer spending stronger, broader economic fundamentals strong in support

of consumer spending. And business investment should be positive. Re impact of

trade deals, resolution of uncertainty would be positive for business sentiment.

We have heard from business contacts that uncertainty is a concern if you import

or export.

- Q: Talk more about transitory factors weighing down on inflation?

- A: Don't mean to diminish concerns about too-low inflation, but good reason to

think that transitory factors at play. Portfolio management services which

decline with a lag when asset prices decline, so should reverse. Apparel prices

(change in methodology), airfare services. We won't know until we see but reason

to think those are transient and will turn around. Trimmed mean measures didn't

go down at all. We will be watching carefully. Points to cell phone service

price decline in 2017 as example of Fed being vindicated on seeing that as

transient