Leading the fight to tame the doubledigit inflation that he inherited as chair, thus laying the foundation for the prosperity and price stability we enjoy today. But what is perhaps most admirable about him more than his many accomplishmentswas his character. He believed that there is no higher calling than public service, and he dedicated the lions share of his life to it. With courage, integrity, and tenacity, he always pursued the policies that he believed would ultimately benefit all americans. My colleagues and i continue to draw inspiration from his example. Turning to todays meeting, my colleagues and i decided to leave our policy rate unchanged, after lowering it a total of 3 4 of a percentage point at the previous three meetings. As always, we base our decisions on judgment of how best to achieve the goals congress has given us maximum employment and price stability. Our Economic Outlook remains a favorable one despite Global Developments and ongoing risks. With our decisions through the course of the past year, we believe that Monetary Policy is well positioned to serve the American People by supporting continued economic growth, a strong job market, and inflation near our symmetric 2 goal. The economic expansion is in its 11th year, the longest on record. Household spending has been strongsupported by a healthy job market, rising incomes, and solid consumer confidence. In contrast, Business Investment and exports remain weak, and manufacturing output has declined over the past year. As has been the case for some time, sluggish growth abroad and trade developments have been weighing on those sectors. Even so, the overall economy has been growing moderately. And with a strong household sector and supportive monetary and financial conditions, we expect moderate growth to continue. As seen from fomc participants most recent projections, the median expectation for real gdp growth slows slightly over the next few years but remains near 2 . The Unemployment Rate has been near halfcentury lows for well more than a year, and the pace of job gains remains solid. Participation in the labor force by people in their prime working years, ages 25 through 54, has been increasing. And wages have been rising, particularly for lowerpaying jobs. People who live and work in lowand middleincome communities tell us that many who have struggled to find work are now finding new opportunities. Employment gains have been broadbased across all racial and ethnic groups and all levels of education. These developments underscore for us the importance of sustaining the expansion so that the strong job market reaches more of those left behind. We expect the job market to remain strong. The median of participants projections for the Unemployment Rate remains below 4 over the next several years. Inflation continues to run below our symmetric 2 percent objective. Over the 12 months through october, total pce inflation was 1. 3 and core inflation, which excludes volatile food and Energy Prices and is a better indicator of future inflation, was 1. 6 . While low and stable inflation is certainly a good thing, inflation that runs persistently below our objective can lead to an unhealthy dynamic in which longerterm Inflation Expectations drift down, pulling actual inflation even lower. In turn, Interest Rates would be lower as well and closer to their effective lower bound. As a result, the scope for Interest Rate reductions to support the economy in a future downturn would be diminished, resulting in worse economic outcomes for American Families and businesses. Against the backdrop of a Strong Economy and supportive Monetary Policy, we expect inflation will rise to 2 . The median of participants projections rises to 1. 9 next year and 2 t in 2021. We are strongly committed to achieving our symmetric 2 inflation goal. Over the course of the past year, our views about the path of Interest Rates that would best achieve our employment and inflation objectives changed significantly, as the economy faced some important challenges from weaker Global Growth and trade developments. As the year progressed, we adjusted the stance of Monetary Policy to cushion the economy from these developments and to provide some insurance against the associated risks. In addition, inflation pressures were unexpectedly muted, strengthening the case for a ore supportive stance of policy. Rather than modestly increasing the target rate for the federal funds rate this year as seemed appropriate a year ago, we reduced it by 3 4 percentage point. This shift has helped support the economy and has kept the outlook on track. The medians of participants projections for economic growth, the Unemployment Rate, and inflation are little changed from a year ago, aside from a lower inflation projection for 2019. Of course, that is the function of Monetary Policyto adjust Interest Rates to promote employment and price stability in response to forces acting on the economy. We believe that the current stance of Monetary Policy will support sustained growth, a strong labor market, and inflation near our symmetric 2 percent objective. As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of Monetary Policy likely will remain appropriate. Looking ahead, we will be monitoring the effects of our recent policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate. Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course. Finally, i wanted to note that we have been purchasing treasury bills and conducting repurchase operations consistent with the plan we announced in december. These technical operations are aimed at maintaining an ample level of reserves and addressing money market pressures that could adversely affect the implementation of Monetary Policy. Our operations have gone well so far, pressures in money markets over recent weeks have been subdued. To address possible pressures in money markets over the yearend, we have been conducting term repo operations spanning yearend. We stand ready to adjust the details of our operations as appropriate to keep the federal funds rate in the target range. Thank you, and i will be happy o take your questions. I was struck by the sort of disconnect that exists here between the behavior of unemployment and inflation. You seem to have unemployment penciled in now for three years running more, underneath the longer run lefrl yet inflation never really accelerated. What are we to make of that . Chair powell whats happening there is the fact that the relationship between utilization and unemployment and inflation has just gotten weaker and weaker over the years. If you had gone back 50 years, you would have seen that when labor markets were tight and unemployment was low, the rate moved up. It got weaker an weaker and weaker to the point where there is still a connection. I would suggest you need to keep policy somewhat accommodative. We think that is p appropriate place for policy to be in order to drive up inflation. Faint no. It is not really influencing prices at all. In that case, what do you do to reach your target . Chair powell the relationship between sflack the economy and inflation has the coefficient is something like. 1. It is much lower than it used to be. It is still there. Look at where wages were three or four years ago. Running around 2 . Now the whole group of different wage measures that we monitor has moved up to 3 and 3. 5 . That sugs tightening. The same thing is true but much less true of inflation. The relationship between in a way the wage phillips curve has a higher coefficient than price curve does. Thats what youre seeing in those numbers. You have used the anooling 1998 to describe the rate cuts we just went through. Im wondering if wec continue the analogy within seven days of those rate cuts, the fed took them back theand some. Were these the rate cuts the kind you need to take back or are we at a neutral rate, take back if the risks dont materialize in the way that you four is this a steady state for the economy or is this a steady state for the economy Going Forward . Powell there are similarities to the time and 95 and 98 when the fed cut only to continue raising rates. The fed needed accommodate a policy but it was not the end of the expansion. We did turn out to do three rate cuts. That was not in the plan in a specific way in the beginning. Thats the same. But whats different is you have different structural characteristics the economy, particularly around inflation. Now, inflation is barely moving unemployment is at 50 year lows and remain and expected to remain there. So the need for rate increases is less. By the way, its a good thing. We have learned unemployment can remain quite low without unwanted upward pressure. Pressurewe need some to get back to do percent two percent. So similarities and differences. Mckee, Bloomberg Radio and television. In septemberded that the repo spike is not a oneoff confluence but reflected issues that could lead to a recurrence. I want to ask you if you agree with the bis findings. And will you be taking any extra steps to ensure funding is available in the repo and fx swaps market . There is a report indicating a good chance of disruptions. One reason they put forward is the fed is buying only tbills in the market wants to sell coupons. Chairman powell im going to take a step back and i will get to your specific question. I want to stress that these are important operational matters without implications. Ampleided to remain in an reserves regime many we are setting the range for the federal fund rates and not as a level of reserves. Our we are committed to robustly implementing that framework. The purpose is to ensure policy decisions will be transmitted to the federal fund rate. We have the tools to a compass that and we will use the accomplish that and we will use them. Is not to illuminate volatility the purpose is not to eliminate volatility. We have gradually allowed the Balance Sheet to shrink, slowing in march and ending in july. We ask of the banks what their lowest comfortable level of reserves, got a buffer, and came out a level below what we were in september. Acted as though reserves had become scarce. Liquidity which existed did not flow into the repo market and that had affects on the federal fund rate. The question is why did that happen . We have been looking at the reasons. There were payment issues and a number of supervisory and regulatory issues raised. Ideas forking for practices and ways that do not undermine safety and soundness. , weo through in time started off on december 17 with overnight operations. By october 11, we have put into effect a plan that is working. For the last couple of months, repo markets have been functioning well and markets are functioning. Asked about year end yearend, temporary influences are not unusual. Our operations and treasury purchases are meant to mitigate the risks that such pressures pose. Think that the pressures appear manageable and we stand ready to addressed adjust the details as necessary. The key to our strategy is to supply reserves , and at theterm same time, raising the underlying level of reserves through bill prices purchases. If it does become appropriate for us to purchase other shortterm coupon securities, then we would be prepared to do that if the need arises. We are not in that place. It looks like those bill purchases are going well according to expectations. We are in regular contact with Market Participants all the time. Andill be continuing that are prepared to adjust tactics. We are prepared to adjust our operations as appropriate. The followup would be, where are we at the possibility with the possibility of a standing repo . Chairman powell we have actually had a couple of meetings where we discussed that. Its something that will take time to evaluate and put into place. At the moment we are focused on yearend. I should mention that the sense is, as the level of reserves time up, there will come a when it will be appropriate for overnight and term repo to gradually decline. Today what the timing will be. Thats the way we see it going overtime. Heather long from the washington post. A number of your colleagues have said explicitly that they do not think the fomc should raise Interest Rates until core inflation is back at 2 . Where do you personally stand . Mentioned,well as i we think our policy rate is appropriate and will remain appropriate as long as incoming data is broadly in keeping with our outlook. Order to move rates up, i would want to see inflation that and isent and its significant before raising rates to reflect inflation sermons. Is the policy of the committee . Im wondering why its not codified as a statement. Chairman powell we havent tried to turn it into some sort of, you know, official forward guidance. It happens to be my view that thats what it would take to move Interest Rates up. Gina, new york times. Following up on heathers today it if you look looks like inflation is never overshooting 2 . Yet rates are increasing in 2021. I guess, how do we square that rates with interest increasing . Chairman powell what you are seeing is you have a full year of the median being flat, which we think is accommodative. Challengescores the of getting inflation to move up. The committee has wanted inflation squarely at 2 ever since i arrived in 2012. Becauseot happened there are disinflation i forces around the world. The out year rate increases more than a year into the future, people have their own explanations. None of us have a sense of what to do in 2021. ,he thought is that, over time it would be appropriate for rates to move up in that direction. I would also say that a number overshootwrote down of inflation under appropriate policy. Financial times. Inflation has either remained where is or not asreased over the past year you have been dropping the policy rate, what is it that gives you confidence the fed has the tools to take inflation back to target or even overshoot . Chairman powell its just that there is still, empirically, by the work of many analysts, a relationship between resource utilization and inflation. Its just relatively weak. By the way, is not a bad thing. It means we can run at low levels of on and have a good labor market without having to worry about inflation. It also means its not easy to move. I would say this more humility than confidence at this. This point. Looking around the world, the United States of all economies has been close to it, but still not able to achieve. Year, core inflation is actually running at 1. 6 whereas it ran close to 2 last year. We are using our tools as best we can to meet that challenge. Nick, wall street journal. Chairman powell i want to ask about the framework review which details of some debate about an overshoot of the 2 target. In that context, it is merely saying you want inflation to rise above 2 . Or would it compel some kind of policy action beyond deferred future rate creases to achieve that outcome . In other words, its one thing to accept inflation rising on its own, but if it does not materialize, what a change in framework necessarily what a would a change in framework necessarily be enough . Chairman powell just saying it no. You have to back it up without them and thats what we are trying to do. And what they were designed to do is strengthen the credibility of that inflation target. But only if followed by policy. Ultimately, it will take time to establish. Will notexpectations happen overnight. The fed has great inflation credibility but expectations are anchored at the 25 year average, a few ticks below 2 . Edward . Edward lawrence, from foxbusiness network. We talk a lot about uncertainty. With the house announcing they ld ratify and mexico said saying they would sign off, do you Business Investment to pick up . Four our tensions with china just the big elephant in the room where you might not see business pick up . I did see today there was an agreement to move forward to vote. Of course, its not our role to comment or criticize or evaluate trade policy. I will say if a deal were to be enacted, it would remove trade policy uncertainty and that would be a positive for the economy. I will say, we have been hearing manypeople, the many, businesses we talked to they have been telling us all year that trade policy uncertainty is weighing on the outlook. Again, without commenting in any way on the process or content or agreement, the removal of uncertainty would be a positive. Is one uncertainty bigger than the other . Not commenting on the deals themselves . Chairman powell i think you can what has been moving Financial Markets . It has been news about china. Nafta and usmca is smaller than current arrangements with china and what is being negotiated. Thank you. Matthew moser, bloomberg. Review hasicy largely been discussed in terms of the inflation side of the mandate. It seems like the message you and somethinging else you have acknowledged is the fed has been systematically overestimating labor utilization. I wonder if you could talk about the extent to which the review is looking at the employment side of the mandate. Are there any possibilities for systematizing an asymmetric function with the reds to employment . Regards to employment . On how tois a use tools to achieve both sides of the mandate. Over many years, we have been learning that the natural rate of unemployment is lower. Broadly, labor economists have seen that we can sustain much lower levels of unemployment than had been thought. Thats a good thing, it means we dont have to worry so much about inflation. And you see the benefits of that in todays labor market. The fed listens event are about inflation to a much lesser extent than they are about maximum limit. If you have attended those discussions, we always focus on inflation discussion is around whats happening and low and moderate income communities. You get a perspective which we were already getting from our extensive outreach to commuter groups but its helpful to get it in the context of Monetary Policy review. The fact that these communities have such high levels of unemployment and low levels of Labor Force Participation tells you there is slack out there. That doesnt form what we mean maximum unemployment. These events have been extraordinarily positive and are certainly something we will repeat. You also see from the business perspective that companies are taking all kinds of measures to look through things on peoples resumes that would have perhaps disqualified them in other environments. There are just a lot of things going on that suggest people at the margins of the labor force are being pulled in given chances. Is there anyway way to systematize these insights . We talk a lot about makeup strategies on the inflation side. Is there anything similar unemployment . On employment . Chairman powell this is something we been saying for several years. Youve seen us moving down our estimates of employment. Understood that there is actually more slack out there in a sense. The risks of using accommodative is relativelyy low. And the review certainly underscores that, but. Hats a very important insight victoria guido with politico. I want to ask about what you are doing beyond open market operations. Are you currently telling examiners not to prefer reserves over treasuries for supervisory purposes . Are you talking to the Treasury Department about reducing volatility . , is it thating repo you would be inclined to do it but need to figure out the details . What would drive the decision on whether or not to do that . Chairman powell on treasuries versus reserves, we have done a ton of work on that if you look at the banks, they are all over the place on their buffer. You have a Business Model that suggests what your stress outflows will be and what your buffer should be. He see them making different choices. Some have lots of reserves and then change their mind. Its not obvious theres one ing. G happen tga, we have not tried to pull the tga into this yet. I dont know that at some point we wont have those discussions, we want treasury to have the cash it needs. We are essentially taking that enous tostion us exog our work. Facility, we are more focused, frankly, on the yearand es, the year end, and the regulatory issues we are digging into. These are structural things where you could, without sacrificing safety and soundness, allow the liquidity to flow freely. We are working hard and fast. Changes come in will take a notice of public role making and months. Those things take time. , those ares now things we have to do right now. Chris . Press. S, associated the only change in the statement was a drop in the reference to uncertainty around the economy. Implies theres a lot of confidence those uncertainties have gone away. What caused you to make that change . Chairman powell what were you what were you looking at . Chairman powell you will notice we called out Global Developments and inflation pressures later statement. And why did we do that . Those are things we have been monitoring all year. We have put into place policies we think are appropriate. But those are key things that have not gone away so we thought it was appropriate to mention the there. That subject to the idea we would to see a material reassessment. Just a followup. Sets tooorried that high a bar for potential cuts next year . No fed policymakers seems to proceed any cuts exterior next year. Does that mean you need to see data actually worsen . Does it reduce your ability to act reactively preemptively . Chairman powell we are mindful we have cut rates three times since july. We do believe that auditory policy operates with long and variable lengths and it will take time before the full effects of those actions are seen in the economy. Thats one reason to hold back and wait. Look more broadly at the treasury yield curve, it has moved more than 75 basis points, so you have had quite a significant move. , iterms of what is material would say whether or not a change in the outlook merits a policy response the collective a collective of the fomc. We will look at a full range of data bearing on the Economic Outlook. Thank you, mr. Chair. You started by talking about paul volcker, who cast a long shadow. I wonder if that shadow was too long, and if in the decades since his tenure, if the fed was too quick to raise Interest Rates to attack and inflation bogeyman that did not materialize. My responseell will not be about poll paul volcker. If you look back at 2080 august 2018, i will just take you back. We had a trillion of a half dollars of stimulus arrived in the federal fund rate was at 1. 4 . We moved policy up during the course of the year. We never got policy even at the level of what we thought the neutral rate was. There is no sense in being restrictive we took steps to make it less accommodative and that seems to be the right thing. Trying tohat we were slow the economy down, we were really just trying to get near neutral. Increase the last rate , we were still meaningful fully meaningfully below. The facts on the ground have changed. Saw a Global Economic slowdown. We saw a Global Economic slowdown continue this year. Just look at the imf forecast for growth and compared to now. Situation isde just beginning and i think it meaningful effect on output just through the uncertainty channel and tariffs. Thats not to make judgment to us. That would be my story. Donna with cnn. The followup, could you talk about what you would imagine the economic effect would be if negotiations with china were to fall apart and how the fed could support the economy . Chairman powell i would not want to speculate on a hypothetical. We just have to see. We look at a range of factors. We try to look through the volatility in trade news and negotiation. Monetary policy is not the right volatility ando things that can change back and happened and is probably typical of a large negotiation. Again, i dont want to get into hypothetical outcomes. Im just wondering you met with the president last month. Did you have any advice for him . Hen it came to this chairman powell im going to stick with my predecessors longtime practice of not discussing private meetings with. Lected officials thank you. French press. Leadersy, democratic launched an impeachment process against the president. , thesementioned developments potentially present some risk for confidence in the economy. Chairman powell no we have not. We do not consider things like. Hat dow jones newswire. Serve a dot plot still meaningful purpose or do you feel it might be time to retire . Chairman powell properly understood, it can be useful, but that has been a challenge. Properly understood it to me means looking at what is not what it isnt. Oft isnt is an expression individual Committee Members about appropriate Monetary Policy. Remember, we write all of that down, send it in, it gets compiled. But theres no agreement or plan. Particularly in inflection points, its hard to convey the reality that policy will always andnd on Economic Outlook the dots are just not a consideration. If the dots to agree, thats not even in the conversation. But it can be useful. But as i said, it has been a challenge i like to say, if you focus too much on the dots, you. An miss the broader picture market watch. Powell, chairman many seem concerned the results of the framework will be less rather than more. , asking whysaying you took 4 inflation rate across the table. Said, i dont think i heard anybody worry about a 4 inflation rate or think a higher rate would be a problem. So what does that concern come from . Is it members of congress . Say,man powell let me been working on this all year and we are just at the stage where we have had an interesting discussion about various tools. At this meeting we talked about the weight Monetary Policy has affected different groups of the economy. We are just getting to the stage where we are looking at conclusion and what we take away from all of this. Many of these would wind up as changes and modifications i think that process would take until the middle of the year but we want to approach it thoroughly and carefully. That is our framework document and i would not prejudge. I believe we will be able to make a successful conclusion and ike any full improvements think its premature for people to be saying this is not going if you defined going anywhere as an inflation target, let me describe the target. Let me go back to the point that just saying words is not itself credible. If you say you are raising it to four, where is the credit ability . Credibility . You have not been able to get it to two. Is this within our legal mandate . I think thats a fair question. I would like for this review to come out with a set of positive results. Meaningful improvements it does not have to solve every problem Going Forward. We want this to be a successful exercise where we meaningfully improve Monetary Policy framework. Evolve. Ings tend to ,f we do this again and again that at least we are moving in a good direction. L. A. Times. You have had a busy year. And as you look back im wondering about things he might have done differently and any lessons you would take it to next year. Chairman powell i would say hello i total focus is on right now getting policy right. Thinking about what is the economy doing. I like where we are in policy. The stance is appropriate and likely to remain so. Its too long of a question. I dont know how to get after that. Theres a lot of learning that comes from the economy every year and in the way we do our jobs. We are always going to be trying to learn lessons. Any particular surprises . Seerman powell i didnt coming the challenges we face this year. They were a surprise. Of 2018, there was still sense the economy was growing and we didnt expect to face the challenges. Think we did face them and im pleased we moved to support the economy and the way that we did. I think will prove appropriate. I think both of the economy and Monetary Policy are in a good place. Nancy marshall from marketplace. Chairman, why arent we seeing stronger wage gains . Now than growing more in the beginning of the year. Why is that . Chairman powell wage gains have moved up a bit. Moreee them now moving towards 3. 5 . Nt they growing faster . One would be that productivity has just been low raises low. Wages should go up with productivity, which has been low. Also think there are other potential expert nations, such as globalization. The idea you could make manufacturers or provide services anywhere in the world to anywhere. I think that hangs over the wage setting process everywhere. There isnt the kind of traction in the wage market. Market mayhing, the not be as tight as we thought it was. Manyow, there are possibilities and expeditions. Say, if you look at nonsupervisory employees in the labor report, the wages are growing up. It wages are going up the most for people at the lower end. Up,ou do see wages moving just not at very high rates. At the end of the day, that has the most to do with productivity. Can i ask a quick followup . Just as far as the market not being as tight as he thought, or a saint are still more people on the sidelines enjoy the labor force who could join the labor force . Chairman powell we asked people the natural rate of unemployment, people writing ,umbers in the fives and fours now its been in the threes for year and a half. The level of Wage Inflation has actually moved down though there may be computational effects about younger workers coming in at lower wages. But that shouldnt have much of an effect, actually. It may just be theres more slack in the economy and i think we are seeing that. Without there, was a trend line in participation declining participation. Seenthstanding, you have prime age participation trending up. It means less tight labor market. A less tight labor market. Hannah lang, american banker. About theseask agencies joining together without a proposal from the fed. Are you concerned this might cause confusion and how might the mechanics work . Chairman powell we know the cra is an important law we are strongly committed to the mission of ensuring banks provide credit throughout the communities. We also think its time for modernization and worked very hard to align with the occ on a proposal. My hope is that we can still do that. See. Ll just have to im not sure what the path forward would be, we would not want to create confusion or ifsion between the regimes they do turn out different. To come upont have but we will if we have to. Brian chung with yahoo finance. Said something colorful about the labor market. Seems well explored , but what would you need to call the labor market hot, in that case . Wages. N powell really, that are 70 other measures suggest the labor market is strong. I dont really want to say it is tight. Someone asked me about a hotly market, and i will say it strong. I do know that its tight because you are not seeing wage increases. Its tight, it should be reflected in higher wage increases. So does come down to that. You look at countless measures of labor utilization there are so many. One its a healthy number3. 1 is a decent 3. 7 is more healthy. Ultimately, to call it hot, you would want to see heat, higher wages. Thanks. House democrats move ahead wo articles of impeachment against president trump. Articlestext from the of impeachment now on our website, cspan. Org impeachment. Of theay, members Judiciary Committee will convene to write the final language. Watch cspan3 throughout the final process. Follow the process live on cspan3. Or, listen live on the free cspan radio app. Cspans washington journal, live every day with news and policy issues that impact you. Coming up, your reaction is the house Judiciary Committee considers articles of impeachment. Join the conversation all morning. Watch washington journal, live at 7 a. M. Eastern. Join the discussion. The justice departments Inspector General testified before the senate Judiciary Committee on fisa abuse allegations this is the first part of the hearing for the committee recessed for boats. It is nearly two hours and 20 minutes