information from the most recent meeting. it was announced there will be no change to the interest rate and the goal is to maintain 2% inflation. this runs 40 minutes. >> good afternoon and welcome. concludedting that today, we reviewed developments in the u.s. and around the world and decided to leave our policy interest rate unchanged. my colleagues and i have one overarching goal. to use our tools to sustain economic expansion with a strong job market and stable prices for the benefit of the u.s. people. our last meeting, data has been in line with our expectations. economic growth and job creation

have been stronger than we anticipated. inflation has been weaker. the economy continues in a healthy path. the committee believes the current stance of policy is appropriate. the committee also believes solid underlying fundamentals are supporting the economy including accommodative conditions. rising wages. strong consumer and business sentiment. job gains rebounded in march. the pace needed to absorb new entrance to the labor force. in private growth consumption slowed. bouncewo components will back, supporting our expect tatian of healthy gdp growth. the committee is strongly

committed to 2% of flake and -- 2% inflation. it ran below our objective, alongside slack and resource utilization. last year, with the rate at or below 4%, it moved up. was close to 2%. overall inflation fluctuated above 2%. do tohe moves mostly changes in furniture prices. overall inflation fell. inflation ended in march was 1.5%. core inflation fell as well. thestood at 1.6% for previous 12 months.

we expect transitory factors may be at work. our view remains with a strong job market and continued growth, it will return over time. year, atart of the number of crosscurrents presented risks to the outlook including week global growth. the possibility of a disruptive brexit. unresolved around trade negotiations. while concerns remain and all of these areas, it appears risks have moderated. have eased.tions china anda from europe shows some improvements. disorderlyt of a brexit has been pushed off. there are reports of progress in

the trade talks between the u.s. and china. the committee views these developments along with the outlook for continued growth, a inflationlook and pressures is consistent with monetary policy. over the past several months, we have made a number of consequential decisions about our balance sheet. -- which involves an ample supply of reserves. in march, we decided to slow the pace of runoffs and cease runoffs entirely. these plans support our dual and providectives clarity about the path of our asset holdings. today, we had a preliminary discussion about the portfolio. before the financial crisis, the portfolio was weighted toward a shorter term debt of the federal

government. in the wake of the crisis, the fed bought larger securities with the aim to lower interest rates and support the recovery. these purchases, our portfolio is weighted towards longer-term securities. we will have to decide what should be incture the longer-term. this raises many complex issues and has possible implications for the policy. this laid the groundwork for more complete analysis and discussions. pressing need to resolve this matter. any decisions we ultimately reach will be implement it with considerable advanced notice. emphasized,ften adjustments may will be needed as the process unfolds.

finally, we made a small technical adjustment in one of our tools for lamenting monetary policy. does not reflect any shift in the intended stance of monetary policy. these the rate to keep federal funds rate in our target range. affectedxpected be rate would shift up over time. rateyear, we lowered the by five basis points. ther the rate moved toward top of the range. rate actions help keep the within the target range. today, we made one more change. thank you very much. i will be glad to take your questions. >> thank you.

inflation, running below 2%. it has been falling for three straight months. above only been at 2% or one month since 2012. address lowo inflation through policy? yourus send sense of metric for one it would be time, when it would require a policy response from the committee. >> we are strongly committed to our 2% objective. think theoned, we stance is appropriate at the moment. we don't see a strong case for moving in either direction. inflation actually ran pretty close to 2% for much of 2018. out, both headline and core did, in on the soft

side. we say in our statement of longer running goals and monetary policy strategy the committee would be concerned if it were running above or below 2%. something that will sustain over a time. in this case, as we look at these readings in the first quarter, we do see good reasons of thek some or all unexpected decrease may wind up being transient. i point to things like portfolio management and other things. trimmed meanthe measures of inflation did not go down. persistent,e a inflation running persistently below, that is something the committee would be concerned about.

>> let me carry on in the same theme. there has been a lot of speculation about prospects for rate reduction. do you think markets have effectively gotten ahead of themselves? what sort of economic conditions would you need to see to give serious considerations of a rate cut? the 1995 example, do need to see a looming recession or could insurance cut the appropriate? >> we have just come through a two-day meeting and done a deep dive on economic and financial conditions. not about our policy. we do think our stance is appropriate. we don't see a strong case moving and either direction. do of course though, as a routine matter, we look not only at our baseline, we look at

alternative simulations, both better and worse and ask ourselves with the appropriate policy response would be. comfortable,e are the committee is comfortable with the current policy stance. shifting gears, i wonder if you could flesh out, i know you are describing it as a small technical adjustment. but in the federal funds spread, give us a sense why it matters whether this reaches the upper limit a little bit. is there any feedthrough to broader conditions you worry about? or is it simply a matter of the fed saying it can control what it says it is controlling? >> a small temporary deviation would really carry, would not be

important as your question suggests. we think it is important we control the federal funds rate and keep it within the range. that is good monetary control. we think it is important. we have the tools to do that. a technical fix, it has no implications for policy. >> it is demonstrating you control the market, the question is at what point with these this widenings, of the spread, essentially become the policy choice? rate, wederal funds control only directly the federal funds rate. the transmission into other short-term rates has been very good. that is important. it is broader financial

conditions that matter. fed controlling the rate is important. us not controlling it. we will continue to control it and transmit it well under broader financial conditions. >> michael mckee with bloomberg. am curious about the financial conditions you see out there. uinutes -- was there a broader discussion? any discussion about whether there risks are growing. to li'lssible rates are at this point? stability a financial every other meeting.

we had that discussion as well. i think there have not been a lot of changes since last meeting but i will think about the way we think about it. it out for comment. welcome any feedback we get from the public. that enables us to focus assessments on the same thing. held accountable. there are four aspects will go through quickly. is while there are concerns around not financial corporate debt, the finding is vulnerabilities, financial stability vulnerabilities are moderate. in addition, i would say the financial system is quite resilient to shocks of various kinds.

at ourr things we look first, asset prices. some prices are elevated but i would say not extremely so. households are in good stand -- shape. financial corporate is an area we have focused on. there are concerns about that, not so much from a financial stability standpoint but having a corporate sector could be an amplifier. the last two things are about the leverage in the financial system and funding risk. those are low by historic standards. vulnerabilities are moderate. >> curious as to whether the level of asset prices, you might not be interested in cutting rates. risks to the

runncial system, are longer statement of monetary policy, risks could prevent us from achieve our goals are something we take into consideration. it really, the tools for addressing those concerns are better capital liquidity, good supervision, stress testing. those are better first order tools. >> with the benefit of hindsight, did the rate increases make it harder for the its inflationm target? would it be appropriate to lower rates if core inflation remained enclosed to 2%?

do you worry about unwelcome tidying in real rates? >> to your first question, if you think about the middle of last year, inflation was at 2%. there.d to be staying the economy was quite strong. the physical changes were hitting the economy in a positive way. i think the expectation was inflation would remain around 2%. the week first quarter performance was not expected, i don't because related to anything we did in terms of raising rates. we don't know this but you never some of it does appear to be transient or idiosyncratic.

>> if it was an issue, would it be appropriate to lower rates? if not, are you worried there is unwanted tidying from real rates being where they are? this in ourress constitutional document. if inflation were to run this instantly below 2%, that would be a concern for the committee. important is inflation run close to a sustained time. if it does not, you run the risk inflation expectations, as has been the case, most of the misses are on the downside. they could be pulled down. that could make it harder for us

to react to down terms. support the economy and difficult times. >> as you just mentioned, last year when you were kind of getting inflation around 2%, you had the benefit of the tailwind of fiscal stimulus. you still have it to some extent. inflation think about as that fiscal benefit wanes toward the end of this year? inflation, it is going to move around. the biggest single factor driving it is the rate of underlying inflation. where inflation expectations are headed.

we think slack, the level of slack in the economy does play some small role. it is a measurable role. when theike the 1960's phillips curve was steep. that is something that plays a role. take all those things into account. the part of it we can control is the slack part. we do expect this reading will be transient and inflation will move back up. 2%,t is not and runs below that is something we take into account. >> pivoting a little bit about wages, women's real earnings have gone up about 3.9% compared

to men. do you think the relative increase in women's wages is a problem for the u.s. economy? >> i think generally, i would have to see the data in that. it sounds like you picked a particular timeframe. i think men and women should make the same for the same work. >> just to push a little on this, if the data shows women's wages are rising higher, is there a damage if males wages are not rising as fast? >> i think we are getting to commenting on a nominee of the fed indirectly. it is not my role to engage with

potential nominees. i have not seen this research so i do not really know. >> i wanted to ask, early last month, the fed wire system went down. couldwondering if you talk about what happened there, how long it lasted, whether you are still looking into it. whether it is something that could happen again. >> that is right. i want to say it was april 1, but it have been april 2. the fed wire did go down for a few hours. we were able to quickly identify the problem. it was an internal problem. we were able to correct it and make changes so the problem could not repeat itself.

we learned from this instance. they are fairly rare but we learned from them. in this case, it was internal and it has been corrected. >> not -- next month we have the 10th anniversary of the end of the recession. there are some countries that have had expansions for 15, 20, 25 years. somethingnk that is that is practical for the u.s.? you personally, if we had a recession in your tenure, would you consider that a earlier? >> i wouldn't want to speculate. there is always the example of a straw you everyone is aware of where they are in your 28 of their expansion. things are possible. all i can see is we have an economy where the expansion is

continuing. the labor market is strong. we see wages moving up. inflation is low which gives us the ability to be patient. we do expect it to move up and we want it to move up. ics in a good path for this year. >> do you see parallels with the 1990's? out in the have it past expansion, there was a rate cut in 1990 five. rates went up and they came down. do you see similarities. >> similarities in the length. the situations were quite different. this is before inflation was under control. it is very interesting to look at the history. i find it interesting. our own cycle, we have faced

a particular set of challenges that are relevant now. >> you have repeatedly said the fed is going to conduct monetary policy without regard to political pressure, but it seems as if the president is intended -- intent on increasing that pressure. int do those comments do yous of affecting how convey policy and your decisions to the public? we are a nonpolitical institution. not think about short-term political conditions. we do not consider them making our decisions one way or another. we are trying to carry out our mission, extend the economic

expansion, keep the economic expansion strong. to give you an idea what the process is like, for the past 10 members will have made extensive preparations, catching up on the latest data. talking to their colleagues and their staff. we talked to literally thousands of business people and market people. people in the nonprofit sector. just get a better center -- since of the economy. we come together for two days. the first becomes with an economic briefing. up most of the first day. we talk about this in great detail. we think about that. we come back and we talked about

in this case, we came to a unanimous decision after an extensive discussion that our monetary policy is appropriate where it is. think our stance and will be patient. riskso see the evolving picture is consistent with that outlook. we do not feel the data is pushing us in either direction. of course, we will not hesitate if we do. process, that is how we think about things.

>> what do you say to people who say it is difficult for the fed to stoke inflation with creating a bubble? we were pointing to is that inflation has gone down and down and many central banks struggle to reach inflation as a whole. that includes us, but we have come closer than most others. is a question of demographic and other large forces that are making it this inflationary. it creates significant challenges. one is that interest rates will be lower. that is one of the reasons we are having a review about , totary policy strategies you aabout the problem

connection to financial stability. earlier, we do consider financial stability to the extents with written achievement of our goals. that macro the view prudential and regulatory tools, things like the stress test, those are the best defense against financial instability. the financial system is highly resilient to the kind of financial stocks can have -- shocks that can have. >> this morning, the highest manufacturing index had its worst reading since october of 2016. -- is that a direct

not a dark cloud on your outlook? wage does this hold for you and is it a sign that monetary policy might be too tight. >> this is the iso and reading from this morning. that as a positive reading and consistent with what manufacturing has been weak around the world about services have been growing faster. so this is something that we are watching carefully, but we do expect contributions to grow. >> thank you, mr. chairman. talk about domestic growth a little bit. you mention progress in the talks with china trade, progress in talks with japanese trade.

talk about the domestic growth .hat we are seeing their >> my outlook is a positive one for the u.s. economy and growth for the rest of the year i was say the basis for that really is consumer spending and business investment. we saw stronger retail sales in mentioned, the commission to broader economic fundamentals are in strong financial conditions and high confidence readings and high levels of employment, wages going up, all that will support consumer spending. that is a significant part of the outlook this year. in business investment should also be positive in that sort of

direction. in terms of the effect of trade deals, i think one thing would be the resolution of the uncertainty. the uncertainty is a concern, compartmental's for the product. that would be a positive. most of the gains, i would expect even from a successful negotiation, would come in overtime. not the kind of thing where you would immediately feel the effects right away. it would be important over a longer time. that would be the expectation. i don't know, i have not seen

the details of what has been negotiated. getting back to inflation, can you talk more about the transitory factors holding down inflation? and howificant they are you think these factors will pass? >> let me just say, i do not mean to diminish concerns. there is good reason to think that these readings are particularly influenced. when asset prices went back up, probably, there would be a swing around there. although once again mentioned are things like apparel and prices which are very low.

they do not know until they see, but there is reason to think those will be transient. another way to look at it was that there are models that look at inflation. measures like i mentioned. big movements on the upside and downside and inflation of .roduct categories , willis reason to think be watching to think that is the case. i would point to the case of cell phone services. there was a very low reading for cell phone services.

it has dragged on core inflation for a full year. , theyught so and that's a had those months of 2% inflation. will have to see here, we could be watching. how these to see things are transient. i will end by saying we are strongly committed to the 2% inflation in active. up.ust following you are saying a couple times a you will take this into account with monetary policy. how specifically will you take that into account? >> it is hard to say because they are so many variables.

ultimately, there are many variables to be taken into account, but that is part of the mandate. 2%.efined as >> so cutting interest rates -- >> i can't really be any more specific than what i have said. high. you see room for and canioer adjustment thatpeak to any tools might be useful for keeping the ceiling on low term interest rates. >> as needed, we will use our

tools to keep the rate somewhere in the target range. . expect me to do it again, but we don't know. sheet, the size it will be driven by demand for liabilities, principally reserves. we are right the point where we're starting to learn more and more about the real demand for reserves is. there is no template, we just have to do it. that is what we taper the rolloff to 15 billion and treasuries per month. effectively, we are cutting the rate for treasuries in half, just because we want to take our time and move gradually. tools, we areher at, i'm sure will be looking at the idea of a repurposed facility.

we will be taking a look at it as a possible addition to our toolbox. again, i would say it would just be in a way for us to do what we do, to do a deep dive and think carefully about it in the pros and cons of possible ways to do it, and then go away and think about it. and then go back and make a decision. >> on the regulatory side, the fed and other regulators are said to be waiting all options to retool a proposal to the volcker rule. indication to how close they are to coming to a solution and what it might look like? whether it might be starting from scratch or making changes to the original? we put out a proposal on poker some time ago and got a lot of comments. i really don't have a lot for you. i know they are making good

progress, i don't have a date. in terms of what it will be, it's not something i can say with any certainty. high there. -- hi there. what you have said with consumption bouncing back in the next gdp reading, i'm wondering if you think that continued growth white shell and underlying fundamental that could flag another overheating. , i'm just kind of curious about what you see going forward if we continue to see strong gdp numbers. >> we don't see any evidence of overheating. we see inflation below 2%, as mentioned, pretty close to 2% for most of last year. really no signs of overheating. if you look at the labor market, there are anecdotal reports of

labor shortages and difficult in finding skilled labor. nonetheless, you have very strong job creation and wages moving up. you have a rate that is appropriate for productivity, but not all signaling overheating. really not seeing signs of overheating at the moment. >> heather for the last question. are wages ever going to get back above 4% in the cycle? can you give us a read? or subsequently, how the committee views productivity growth, if it is accelerating enough? >> in terms of wages getting over 4%, wages have moved pretty steadily over the last five years.

wages and benefits are between 3.5-3 percent. for the last couple of years, the biggest part of gains have come for people at the lows and the compensation and education, which is kind of a welcome thing. productivity, productivity is really a very difficult to predict. no one has been able to predict it successfully, so i will not try. but i will say this, productivity was very low for six or seven. -- six or seven years. last year, it was much higher. i don't know if that can be sustained, but we have proven to some extent. it is hard to predict, i think it is positive we talk about the supply side. as been a significant positive

supply-side development. this goes back several years, and also productivity. it suggests room to grow, a ofht economy, maybe part expedition for lower inflation. >> thanks very much. >> on the next washington william the reaction to -- two attorney general william barr's new report in his decision not to testify on a judiciary hearing. comments,ur calls and live at 7 a.m. eastern here on c-span.

coming up live on thursday, the house back at 9 a.m. eastern to continue work on climate change legislation. , the senate votes on a measure to override the president's veto of legislation and the u.s. involvement in the yemeni civil war. p.m., jared kushner talks about efforts to achieve middle east peace. c-span3 at 9 a.m., the house judiciary committee eats to review the findings of the mueller worked into russian interference. attorney general william barr was scheduled to appear before the committee but has announced he will not testify due to disagreements over the attorneyng process general william barr testified on the report released by special counsel robert mueller on his investigation into russia's interference in the 2016 election. this was to be the first of two

hill appearances this week, but he has pulled out of his testimony before the committee on thursday. attorney general barr answered questions from the judiciary on how his office handled the release of the mueller report and other investigations that resulted from the special counsel investigation. portion hour 45 minute of the hearing includes opening statements from the committee leaders and the attorney general. . the first order of busines