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tv   Federal Reserve Chair Powell Holds News Conference Following December...  CSPAN  December 20, 2018 6:11am-7:01am EST

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legislation. on c-span two, the senate is in session after approving a temper responding built. majority leader mitch mcconnell said the chamber is coming into monitor what the houses going to do on the government funding bill. c-span3also be live on at 10:15 a.m. with homeland security secretary cures to toson on capitol hill testify before the house judiciary committee. the top democrat on the committee says he plans to ask the secretary about the death of a seven-year-old girl from guatemala who was in border patrol custody. a couple of headlines from bloomberg news -- markets revolt as steadfast powell downplays recent selloff. the washington post -- federal reserve cuts its outlook for u.s. economy and stocks plunge. the federal reserve short-term interest rates are raised. president trump has called it foolish but the fed also downgraded its economic outlook for 2019, triggering a steep
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selloff in the markets. here's fed chair jerome powell at the press conference announcing the action. chairman powell: good afternoon, everyone, thank you for being here today. over the past year, the economy has been growing at a strong pace. the unemployment rate has been near record lows and inflation has been low and stable. all of those things remain true today. since the september meeting, some cross current have emerged. good afternoon, everyone. over the past year, the economy has been growing at a strong pace. the unemployment rate has been near record lows and inflation has been low and stable. all of those things remain true today. since the september meeting, some cross current have emerged. i'll explain how my colleagues on incorporating things and the outlook for the pro pick course of policy.
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since september, the u.s. economy has been adding jobs. wages have moved up for workers across a wide range of occupations, a welcome development. inflation has remained low and stable and is ending the year a bit morsi subdued than most had expected. although some american families and community continue to struggle, and some longer-term economic problems remain, the strong economy is benefiting many americans. despite this robust economic backdrop and our expectation for healthy growth, we have seen developments that may signal some softening, relative to what we were expecting a few months ago. other economies around the world have moderated over the course albeit at still solid levels. the financial market volatility has increased over the past couple months, and overall financial conditions have , tightened and have become less supportive of growth.
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in our view, these developments have not fundamentally altered the outlook. most fomc participants have instead modestly lowered their growth and inflation forecasts for next year. the projections of committee participants released today show growth continuing at healthy levels, the unemployment rate falling a bit further next year and inflation remaining near 2%. , the projections also show a modestly lower path for the federal funds rate, which should support the economy and keep us near our goals. as the economy struggled to recover from the financial crisis and the subsequent recession, the committee held our policy rate near zero for seven years to give the economy the best chance to recover and , the economy did recover steadily, if slowly, at times. three years ago, the committee came to the view the best way to achieve our mandate was to move interest rates that are more normal in a healthy economy.
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today we raised our target range , for the short-term interest rates by another quarter of a percentage point. as i have mentioned, most of my colleagues expect the economy to continue to perform well in the coming year. participants had expected that economic conditions would likely call for about three more rate increases in 2019. we have brought it down a bit and now think it is more likely that the economy will call for two interest rate increases over the course of next year. we always emphasize that our policy decisions are not on a ifset course and will change incoming data changes the outlook, and given recent developments, the statement notes we will monitor economic developments and assess their implications for the economic outlook. now i will provide some , additional context and detail starting with a review of policy over the last year. last december, the unemployment rate was 4.1% and inflation had
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been running just below 2%. fomc participants and other forecasters were predicting that growth in 2018 would be strong. tos growth was predicted push the unemployment rate down near historic lows and the labor , market was expected to push inflation up to 2%. given this outlook, committee members judged that the appropriate way to sustain the expansion with inflation near 2% was to continue gradually withdrawing the extraordinary support for the economy that had been in place for almost 10 years. thus in december 2017, the median projection of fomc participants pointed to three quarter point interest rate increases in 2018 which would have left the target rate for 2.25%,eral funds rate at still below most estimates of the normal rate. early in 2018, it became clear that the economy was likely to be even stronger than we had expected, in part because the
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fiscal stimulus adopted near the start of the year was larger and more front-end loaded than most anticipated. the signs of a more robust economy proved accurately and the fomc raised rates four times, one more time than anticipated in the median projection a year ago. this illustrates the nature of data dependence that we always emphasize. in 2018, the economy was somewhat more robust than expected and this led to a faster policy normalization than had been projected. when the economy has instead turned out weaker than expected, the committee paused rate them as wer slowed , did in 2016. and when the economy has performed as about as expected, the committee has generally moved in line as we did in 2017. what kind of year will 2019 be? we know the economy may not be as kind to our forecasts next
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year as it was this year. unforeseenests that events as the year unfolds may buffer the economy and call for more than a slight change than the policy projections released today. with that caveat, there are two important differences in the policy outlook today versus next year. in early 2018, we saw a rising trajectory for growth. today, instead, we see growth moderating ahead. fomc participants along with forecasters had long predicted some moderation of growth in 2019. the additional tightening of financial conditions we have seen over the past couple of months along with signs of somewhat weaker growth abroad have also let us to mark down growth and inflation projections a bit. the median rejections show growth of 3% this year and 2.3% in 2019, with growth remaining above its longer normal value. the unemployment rate is
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projected to fall a bit further to 3.5% by the end of 2019. inflation in the median projection remains near 2%. second, the economy has continued to strengthen this year and given our four rate increases and the ongoing reduction in our portfolio, monetary policy will be providing a smaller boost to the economy in 2019. after today's action, the target range for the federal funds rate is 2.25% to 2.50%, putting it at the lower end of the normal rate provided by the committee. over the next year, if events play out broadly as expected the , federal funds rate will be in a range in which judgments of people inside and outside the fed will sometimes differ regarding the policy if it is moderately essentially neutral or restrictive. when rates are in this range, they make policy in light of the array of diverse views on the committee.
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moving forward, my colleagues and i will be watching the economy closely for indications that this policy is appropriate to sustain the strong labor market and inflation near 2%. it's worth noting that the summary of economic projections is a compilation of the individual projections of all fomc participants. we sometimes point to the median of these projections to support the broad views of the committee. each projection represents appropriate policy under the baseline outlook provided by that participant. providese that the sep useful information about participants' thinking. but it is not a consensus judgment and does not represent a committee plan. actual policy will, as always, be adjusted as incoming data shed light on the state of the economy, the outlook and changing balance of risks. neither the pace or the destination of any further rate
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increases is predetermined. we will adjust monetary policy as best we can to keep the expansion on track, the labor market strong, and inflation near 2%. we know our policy decisions affect all american families and businesses, and we will continue to make our decisions objectively and based solely on the best information and analysis. thank you, and i will be happy to take your questions. reporter: thank you. sam from the financial times. one of the surprises have been tepid inflation data. i wonder if you could explain why you think despite the extremely tight labor market, we still are not seeing much in the way of inflationary pressures, and in the context of a more data dependent said, how would the fed respond to a further undershoot of inflation moving into next year? thanks. chairman powell: you are right.
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sam, inflation has come in just a touch below where we expected it to be, not by a big amount but by a small amount. , more broadly, 2018 has been a strongest year since the financial crisis, and during that period, we have had low unemployment and strong growth and inflation has remained a , touch below 2%. so i do think that gives the committee the ability to be patient in moving forward. as i mentioned, there is significant uncertainty about both the path and the ultimate destination of any further rate increases. long fromhi, heather "the washington post." today, the fed lowered its expectations for interest rate increases. given that, i'm wondering if the fed had any discussion about
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altering the balance sheet normalization and if you could give us an insight what might alter that in 2019. chairman powell: sure, if you go back some years, i think, people who were working at the fed in 2013 and 2014 took away the lesson that the markets could be very sensitive to news about the asset purchases and runoffs and things like that. so we thought carefully about this about how to normalize policy and named to the view that we would effectively have the balance sheet run off on automatic pilot and use rate policy, monetary policy, to adjust to incoming data. and i think that has been a good decision. i think the runoff of the balance sheet has been smooth and has served its purpose. i don't see us changing that. and i do think we will continue
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to use monetary policy, which is to say rate policy, as the active tool of monetary policy. report: thanks. journal." wall street chairman powell, you talked earlier about the ability to be patient. so as you think about your next policy moves, are you inclined to go with the current recent pace to a slightly different destination that is made out in the projections today or does the current environment of restrained inflation maybe allow you to space out your next few moves and take more time to get there? chairman powell: so, as background, i would just point to 2018 being a very strong year and the committee looking , forward to 2019 and still having what amounts to a positive forecast. we still are forecasting , individually growth a bit , above its longer run potential, 2.3% is what we are
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forecasting. we are forecasting that growth will be strong enough and that unemployment will drop further and inflation will remain near target, so that is a reasonably positive forecast. going forward, i will be looking in particular to see whether incoming data tell us that we are, in fact, on that path, that development of the economy is in line with that expectation. that will be the main thing. more broadly, though, i think we have reached the bottom end of the range of committee estimates of what might be neutral. i think from this point forward, we are going to be letting the data speak to us and inform the outlook and inform our understanding of what will be appropriate policy. so there is a fairly high degree of uncertainty about both the path and destination of any further increases. reporter: mr. chairman, steve,
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cnbc. could you tell us how three things affected the outlook for the economy and rates? the first is, how the markets decline affected the outlook for the economy and for rates. the second is trade tensions and the tariff or how you factored that into outlook, and the third are comments by the president urging you not to hike rates. chairman powell: so as i mentioned, we monitor a broad range of economic conditions, including financial conditions, a broad range of financial conditions, and we took on board the tightening of financial conditions, which not any one condition but financial conditions have tightened since the september meeting. we took that on board in our forecast. that is why the forecast went down a little bit, but remember, that's in the context of a more
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accommodative past. we did take that into account. from the statement language, we acknowledged those risks in the clause of that monitoring -- about monitoring developments and we will be watching , carefully as those things develop. i think more broadly, there has been a sense of concern among business people and market people about global growth and , you know, that may be partly trade tensions, it may be partly about a variety of things. if you just mechanically drop into a model of the u.s. economy, tariffs, you don't see very large effects. the large effects would have to come from financial market changes or losses in business confidence, and those are things that are very difficult to model. on your third factor, political considerations play no role whatsoever in our discussions or decisions about monetary policy. we're always going to be focused
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on the mission that congress has given us. we have the tools to carry it about. we have the independence we think is essential for us to be up to do our jobs in a nonpolitical way, and we at the fed are absolutely committed to that mission, and nothing will deter us from doing what we think is the right thing to do. reporter: "the new york times." your quote about the inflation target, your forecast that you're going to undershoot it for the eighth straight year. should we interpret it -- some members of your committee believes the policy should be in the restrictive range by the end of next year, and if so, could you explain why people would be advocating restrictive monetary policy at a time of persistent undershoot? chairman powell: as a committee we do not desire inflation undershoots.
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and you are right, inflation has continued to surprise to the downside, not by a lot though. we are very close to 2%, and we do believe it's a symmetric goal for us, inflation. symmetric around 2%. and that's how we are going to look at it. we are not trying to be under 2% . we're trying to be symmetric around 2%. i have never said that i feel like we have achieved that goal yet. the only way to achieve inflation symmetrically around 2% is to have inflation symmetrically around 2% and we , have been close to that and we have not gotten there yet or claimed victory on it yet. that remains to be accomplished. gina, bloomberg news. just following up on that question, i guess if you haven't achieved 2% inflation and don't see an overshoot which would be
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implied by asymmetrical target what's the point in raising , rates again at all? chairman powell: so, again, i go back to the health of the economy. you look at 2018 as i mentioned, this is the best year since the financial crisis. you have growth well above trend. you have got unemployment dropping. you have got inflation moving up to 2% and we have a positive forecast and in that context, we think this move was appropriate for what is a very healthy economy. policy at this point does not need to be accommodative. it can move to neutral. it seems appropriate it can be neutral. we are at the bottom range of neutral. so that is the basis upon which we made the decision. we also took on board the risks certainlynd we are cognizant of it. martyer: mr. chairman, with the ap.
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mr. chairman, you have established for this coming year a communications panel to look at how the fed communicates. could you talk a little bit about what you expect to get from that panel? and will the dot plot be involved in that? how do you think that is working? are we dealing with it with the way you want us to be handling it, or is that something that you might tweak a bit? chairman powell: so this review, what it really is, it's coming at a time when the economy is strong, and it is a good time to step back, we think, and ask whether our strategy and tools and communication around monetary policy is doing the job that congress has assigned us to do on behalf of the american people. and what we are going to do is we are going to open ourselves up and have a discussion with many outside groups of all different parts of the economy
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, including an academic conference in june in chicago, and again, the idea is to listen to new ideas, better ideas, old ideas. many of them have been around -- and try to assess whether there are better ways we can do things. one of the overarching facts is that rates have been really coming down overall for more than three decades now. we may be in a world where interest rates are just lower for the time being, and, therefore, we will have less policy space to react to economic downturns, and we want to be evaluating ideas for better achieving the goal that congress has given us. we are not looking at law changes at all, and we are not looking at changing the inflation target, for example. we are looking for better ways to achieve the inflation goal on a symmetric basis. so that is the sense of that. on the dot plot, it does provide useful reaction of committee
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participants, sometimes more useful than others, i will admit, but, in general, i think people sort of haven't figured out and understand what it is or what it is not, but that does not mean we do not like to repeat it. a consensus forecast or subbing that we vote on. we update it as data come in and as we update our outlooks. mike and then edward. michael, bloomberg. the balance sheet reduction, how much additional tightening do you think has come from that? we note in the markets that the cost of credit rising, commercial paper, repossession widening.ted spreds do you see any concerns about the availability or the price of credit that could slow the markets and in 2019, we see the economy start to slow, if you
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don't adjust the balance sheet be risking too much tightening? chairman powell: we do watch all of that. but the amount of runoff that we have had so far is pretty small and if you use the models in reverse, you would get a pretty small adjustment in economic growth and real outcomes, so we do not think -- things that are happening in the short run, the short end are being driven by many other factors than the balance sheet runoff. very large bill supply pushed up repossession rates, and the tightening of the federal funds rate has raised short-term borrowing costs. we are alert to these issues and are watching them carefully, but we don't see the balance sheet runoff as creating significant problems. >> edward. edward, fox business network. we have seen enormous volatility in the markets. we know the president said don't
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raise interest rates. that is well documented. the national association of realtors said it is affecting first-time home buyers. when do you think we come in mortgage rates going up. next year? we need to keep this gradual. in addition, what data are you looking at for you that shows when the federal reserve starts to become that headwind in the economy with the rates? chairman powell: we have a strong forecast generally for next year. that forecast involves growth between 2% and 2.5% and involves growth at a strong enough level to continue driving unemployment down and inflation near 2%. so that's a pretty positive forecast. so to make further moves, i will be looking at data that suggests that is, in fact the path we are , on. once you are broadly speaking in the range of neutral, i think it's appropriate to be putting aside individual estimates of that and be looking at what is -- what the incoming data are
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telling you about the outlook, updating your estimates of what neutral might be or the natural rate of employment might be in the state of the economy and letting that lead you to adjusting your outlook and therefore your appropriate path for policy, that's what we mean when we say we are data dependent. of course, we are always data dependent, but i think it has particular meaning in this context. reporter: hi, mr. chairman. i wanted to ask, first of all, whether you are worried that president trump's tweeting and statements might interfere with your ability to communicate with markets and why you are doing, and then also, i was wondering if you could comment on the governor who gave a speech lately and laid out the case for the buffer. do you disagree with her analysis? is that something you think the fed should look at doing? chairman powell: i'm not worried
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about on the first question, because i know and everyone who works at the fed knows we will do our jobs the way we have always done that and that involves getting the best thinking together and diverse perspectives. every business cycle, every fomc cycle, we talk to hundreds of people in all different parts of society, not just business and market people but from community development organizations. we get survey data from thousands of people, so we have a pretty broad exposure to what's going on in different parts of the country and will take all of that information and make the best decisions we can, and nothing will cause us to deviate from that. in terms of the ccyb, it is a capital buffer tool that allows , a us to build capital at a time when vulnerabilities, financial stability vulnerabilities are meaningfully above normal, and so that is a
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tool i am absolutely willing to use and happy to use as such time as that test is met. we meet and discuss that and evaluate it on roughly an annual basis. we have not done it this year, but i think we will be doing it earlier next year and reaching that judgment then. i recently gave a speech saying that i believe financial stability vulnerabilities were roughly at a moderate level. would want tout i leave open, my mind open on that and have a discussion with my board colleagues when the issue arises. >> ian? >> with reuter's. you said policy does not to be an accommodator, but does it need to be as restrictive as the dots seem? chairman powell: no. and i don't believe that it is. i don't believe that policy is restrictive. reporter: suggests that it will be restrictive next year --
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should it be? chairman powell: i discussed this a couple of times. it is a very good question. i guess i would just go back to this. the individual forecasts are not something that the committee votes on. they are out in the future. we vote on the rate increase and write down our own personal paths, so people have disparate views on what it could be. ultimately, it will depend on what the circumstances are. there would be situation in which it would be to go past neutral, and there would be circumstances where it would be wholly inappropriate to do so. so i wouldn't put too much -- it does inform you about the way people are thinking about things, but i wouldn't take it as a signal about policy or about near-term policy. >> paul. >> paul, news wires. thanks for the question. in dallas last month, you talked about the usefulness of speaking
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with businesses, sometimes hearing things that aren't yet showing up in the economic data. and i was just wondering if you are hearing from businesses that might explain the recent market moves, you know, are markets on to something that again hasn't showed up yet in the data? thanks. chairman powell: so if you look at the teal book or we get the teal book in person from the reserve bank president and they come in and share their discussions not just with their directors but with literally hundreds of business and nonprofit and labor union people around the country, and i personally find it really interesting. my background is very much working starting with a small , group of people, maybe a company and working out. dataat kind of anecdotal really helps me capture the picture better, and what you are picking up now, i think is -- there is, you know, a mood of
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concern, or it's a mood of angst about growth going forward. if i could just capture it in one thought. there are many reasons given for that, but generally speaking, it is a growth about if growth is going to be as strong, and if not, why? different people. but that mood is out there. that doesn't mean it will come into the real data in a big way, it may, but -- or that the financial conditions will tighten further. we would just have to see. for now, financial conditions have tightened a little bit. we have taken that in the forecasts and also in a lower rate to provide some accommodation to push back against that tightening. that is how i think about it. >> greg and then nancy. from marketwatch. just following up on paul's question, president trump said recently that you should feel the markets, so when you feel
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the markets, what are the markets telling you? you know,owell: financial conditions, broadly speaking, we do not look at one market. we look at a big range of conditions, and what matters for a broader economy is material changes in a broad range of financial conditions that are sustained for a. keeper of time. a little bit of volatility, speaking in the abstract, -- sustained for a period of time. a little bit of volatility, speaking in the abstract, we look for that. there has been a tightening since the september meeting, and that, we tried to factor that into our models of the economy and to the results that come out of those models. that is how we think about it, so we do follow markets really carefully, but remember, from a macroeconomic standpoint, no one market is a single dominant
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indicator and really matters if changes are sustained over time. >> nancy, and then donna. reporter: nancy, with marketplace. do you still think war pc -- is the indicator? we are relying more on another. chairman powell: i think we look e is a goodt core pc indicator. what has happened over really 50 years is that inflation has become much less reactive to changes in growth. there was a time when inflation reactive really quickly to changes in growth and changes in unemployment, and that time is behind us, and that is often attributed to the success of banks and anchoring expectations, so people believe that inflation will come back to the target or around the target,
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so it does not go down as much. inflation does not go down as much, and the downturn does not go up as much when the economy is strong. it is really true though that inflation has not reacted a lot on a road from 10% unemployment to now 3.7% unemployment. year,ou did move up last but in terms of just targeting growth, i think -- i actually think our dual mandate works well, which is maximum employment and stable places -- prices. most of the time, they worked temporarily in different ways. we take a balanced approach. i think that approach has served us well and that we can work well with it. reporter: chairman powell, cnn. bet year, every meeting will a live meeting, so presumably, there will be some adjustment response.he market how has the committee thought
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through communicating potential policy moves, especially in light of the uncertainty going into next year? chairman powell: i think having regular press conferences will be a big gain for communication. i hope so. that is the plan. being able to come out after each meeting and explain the committee thinking, the state of the economy and expectations for policy and global issues, the idea is it will be helpful in explaining how we are thinking and, you know, explaining what we're thinking about policy going forward, so that is the plan. i do believe it will be a positive development. i do believe it will become the there willime that be no prior as to whether we would move and instead of a quarterly meeting or one of the meetings in which we do not file an sep. you know, we do this under the
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approach quarterly. i think we will move to a more -- we will have the ability to move at eight different meetings, not eight times, but at eight meetings. reporter: that is sort of the question i am trying to drive at in terms of communicating to the market because the market has to these rateed hikes, and now you have the potential to move eight times a year. thinking through how that is going to communicate when it plans, especially given the amount of uncertainty? i think powell: yes, that is probably pretty straightforward. if we want to commit kate something that is going to happen at a future meeting, i think we know how to do that in speeches and in press conferences and such. reporter: "the l.a. times."
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broad-based gains in wages, and i wonder if you see further wage growth and how much slack there is in the market. chairman powell: so what we have seen is a very gradual and i think ongoing increase in wages. years, weback a few look at many, many indicators, and there were four printable ones, and they were clustered year, 2, 2 percent per and now they are all at three, and they have continued to gradually move up, not perfectly in sync, but that is the number that is in keeping with 2% inflation and 1% productivity growth, so in an economic sense, it makes sense. i think manyand forecasters expect wage increases will continue, and that would be a welcome development.
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wage increases do not need to be inflationary. there is plenty of evidence of situations, for example, in the very tight labor market in the 1990's, i think i mentioned in a speech a couple of months ago, we had wage increases above productivity plus inflation. we did not have high inflation, so it would be welcome. we hear a great gear of anecdotal information about labor shortages along with other bottlenecks and things, but i would expect that wages will keep moving up, and it does not necessarily mean inflation. we do not think of it that way, so does that answer your question? labor side. so by most indicators, we look at a very wide range of indicators on the labor market, and by most indicators, we are at or even above longer run normal levels, but i would point to one particular pocket, and that is labor force
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participation by younger, prime age workers, particularly prime age males is still meaningfully below its precrisis level. other age groups in both genders have moved back up pretty close to where they were at the last cyclical peak. you know, there is a question, can we go above that cyclical peak? are the problems more structural than cyclical? we will have to find that out. i think given the strong economy we have had the luxury of finding out that labor force per dissipation can be higher than we thought, and that is nothing but a good thing. >> with the american banker. a regulatory question, if i may. so many of the fed's regulatory proposals so far, especially this year, have been entirely ofused on banks in the sort medium to small range, that is sort of tailoring enhanced
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standards, particularly for those banks. i am thinking of the stress capital buffer as well as the most recent proposal on banks up to $250 billion. others were left out of these proposals, and i'm wondering if that is meant to send a message that the fed does not really intend to change its regulatory structure for the largest banks going forward or if you will get to that maybe later, and i am thinking specifically of the capital surcharge which is members of congress have sent you to reconsider? chairman powell: so you are right that a big focus we have been doing has been tailoring regulations. the sense of tailoring is we want to look below the level at the large regionals and then on down to the community banks in various steps and ask whether we
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have appropriately tailored regulation supervision to account for the fact that smaller and less complex organizations present a much less significant threat to the economy and the community should they fail, should they experience difficulty, so in the nature of that, you are focused more on the small institutions. i think with larger institutions, we want regulation supervision to be effective and efficient. i know that larger institutions tend to be the ones that care about the volcker rule. we are working on that. we think things need to be looked at carefully, and, again, i would not want to materially change capital levels, because i think it is important that the largest financial institutions, the largest and most complex systemically important ones be held to the higher standards and higher expectations, and while we may tailor some items, those
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expectations are not going to change. reporter: steve boettner, freelance financial journals, reporting for npr, chairman powell. i know you look at many different financial indicators, but let me focus your attention briefly on the bond yields, and the 10-year yield has gone down pretty steeply, roughly 50 basis points i think in recent weeks. i wonder what you make of it. is it a worrisome sign for you in terms of the outlook for growth or inflation was to mark on the other hand, it could be a positive in terms of presumably ringing down mortgage rates and helping the housing sector. again, we doll: focus on a broad range of financial indicators, and really, we do not obsess about any particular one. we look at able range of them and ask ourselves what is really
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going on in the broad picture out there. if you ask what is going on with the long -- certainly the long treasury market, it has come in some. that is consistent with the risk off feeling in the stock market, as well, and, you know, we do not know if that will persist. really, the longer treasury has moved in a range of 3%, down 3%, as the risk sentiment has changed. rates were to stay low for a longer period of time, it could be a signal of expectations of lower growth, but we do not know that that will happen. our forecast for next year is i think in keeping with other forecast, is that we will still have solid growth next year, declining unemployment, and a healthy economy. chairman, courtney brown from axios.\
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i wonder if you could clear up a little bit of a financial debate. you said in october in an interview with pbs that interest rates were a long way from neutral. a month later, you set interest rates were just below neutral, and i think a lot of people interpreted that as a shift in tone. were they right to interpret it that way? chairman powell: monetary policy is a forward-looking exercise, and i am just going to stick with that. where we are right now is at the lower end of the range of neutral. we arrived effectively at the bottom end of that range, and there are implications to that. as i mentioned, going forward, there is real uncertainty about the pace and the destination for further rate increases, and we are going to be letting incoming data informed our thinking about the appropriate path. >> michelle with the last question. reporter: michelle, bbc news.
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monitoring global developments, i was wondering, you touched on trade, the trade dispute with china, but could you elaborate on what economic developments you are referring to and whether brexit is one of those and what else? broadly, iwell: more am referring to global growth. if you go back a year, 2017 was a year of kind of ongoing growth, andbile people raised their forecast for growth around the world. around 2017. i expect that to continue into 2018. what has happened instead has been a modest retracing of that so you still have still helping levels in the aggregate around the world but close to the potential growth rate of the global economy, but you no longer have the really strong levels of growth that you had in 2017, so that is one. i think that is a key fact.
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we also monitor event risks, like brexit, like the negotiations between italy and the eu over their budget, and as far as those are concerned, we monitor them very carefully, and you mentioned brexit. our financial institutions have had a long time now to get ready for a full range of possible ,xits from the eu by the u.k. and they have had supervisory involvement from u.s. supervisors, from u.k. supervisors, from eu supervisors . we feel they are prepared for the full range of outcomes that may come out of that. went onod to see what with central parties today. that was a big issue that seemed to be satisfactorily for the time being resolved. it is something we are watching carefully. honestly, it should not have major implications for the united states, what there is a lot of uncertainty because it is
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not something that has happened before, so we will be watching it carefully. reporter: thank you. chairman powell: thanks very much. >> here is some of our live coverage thursday. the house returns at 9:00 a.m. eastern and takes up a short-term spending bill to keep the federal government operating through february 8. members also work on criminal justice reform and tax related legislation. on c-span2, the senate is in session after approving the temporary spending will by voice vote edmund -- and majority leader says the chamber is monitoring what the house will do when the government funding bill. live on c-span three at 10:15 a.m. with homeland security secretary kirjsten nielsen to testify before the house judiciary committee. she plans to ask the secretary about the death of a seven-year-old girl from guatemala who was in border patrol custody.
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♪ ♪ >> the united states senate, a uniquely american institution, legislating and carrying out constitutional duty since 1789. on wednesday january 2, c-span takes you inside the senate. learning about the legislative body and the informal workings. we will look at its history of conflict and compromise with original interviews. >> arguing about things and kicking them around and having great debates is a thoroughly american thing. >> key moments in history. an unprecedented access. allowing us to bring cameras into the senate chamber during a session.
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follow the evolution of the senate into the modern era. from advice and consent to the role in impeachment proceedings and investigations. the senate, conflict and compromise. a c-span original production. exploring the history, tradition, and role of the any -- the uniquely american institution. from wednesday, january 2 at 8:00 p.m. eastern and pacific on c-span. be sure to go online at c-span.org/senate to learn more about the program and watch original full-length interviews with senators. view farewell speeches from long serving members and take a tour inside the senate chamber, the old senate chamber, and other exclusive locations. next, live on washington journal, your calls and comments. congress weigh in
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on a possible government shutdown and the robert mueller investigation. we will hear from val demings and republican congressman jodey arrington at 8:30. washington journal is next. host: good morning. the senate yesterday agreed to avert a government shutdown but funding the government without money for a border wall. the white house says they are looking at the deal. what is your take on it? call into washington and let them know, do you support or oppose? if you agree to it, (202) 748-8000. if you oppose the short-term bill, (202) 748-8001. wjn us on twitter at c-span or

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