Central Banks

Wednesday, January 29, 2020 - 15:16

MNI TRANSCRIPT: Powell on Framework Review


WASHINGTON (MNI) - The following is the portion of a transcript from Federal Reserve Chairman Jerome Powell's press conference after the FOMC meeting Wednesday:

Q: Hi, Jean Yung with MNI. I wanted to ask about the framework review again. Would a shift of focus to inflation over an average period, would that call for a different policy stance if you made that shift? And whether or not we know the answer to that question, would the Fed consider changing the stance of monetary policy for that reason even if there was no change to the economic outlook?

A: Well, as you know we're comfortable with our current policy stance and we think it's appropriate, we think it will remain appropriate as long as data coming in are broadly in keeping with our outlook. Over time, over time though, let me take a step back. Over time an average inflation targeting framework would be different than a current framework in a sense that it wouldn't be -- there would be some aspect of trying to make inflation average 2% over time, which means if it runs below 2% for a time, it has to run above to bring the average up, so that's a different framework. Our current framework is one where we say we would be equally concerned with deviations of inflation from a target on either side, but that doesn't suggest an intention specifically to have those deviations be symmetric. In other words, consistent with that would be having all the deviations be on one side, which is what we've had, actually. So I think it is a change in framework and over time it would lead to a different approach to policy. Again, I'm not trying to -- I don't want to comment on the current stance of policy, which we do think is appropriate.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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