Central Banks

Wednesday, January 29, 2020 - 15:16

MNI TRANSCRIPT: Powell: Repo Not Needed for More Reserves


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: The combination of purchases and repo operations are described liquidity and I wonder if you similar an particularly agree with that and what has it been on risk assets? Do you know if that is something that the board or reserve banks are looking into or looking at what the effect has been and how are you kind of thinking about that going forward?

A: Well, so two questions. In terms of liquidity, I think what we're doing is what I said. We're trying to raise the level of reserves back up to a level so banks can meet reserve requirements and that there is enough reserves in the system that we don't see reserve scarcity and we don't have to use repo operations to provide additional reserves, so I think as I mentioned, we believe that we can get to that state at the current pace some time in the second quarter. In items of effects on risk assets, as I said earlier, it's very hard to say what is affecting financial markets with any precision or confidence at a given time. It's not our intention to change the response of monetary policy. These were designed to provide more reserves and really to do that in order to enable better transmission of our rate decisions into the economy under our chosen framework. That's really the purpose of what we're doing.

--MNI Washington Bureau; +86 (10) 8532-5998; email: ryan.hauser@marketnews.com

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