Press conference exchange between RICH MILLER and Fed Chair Jerome Powell:

user: Thank you very much, Mr. Chairman. Thank you, Michelle. I wonder if I could start with the, the SEP. We have—unemployment now is at 6.7, the SEP median sees, sees it falling to 5. Headline inflation is one time 1.2, the SEP median sees it rising to 1.8. And core inflation is 1.4, and the SEP sees it rising to 1.8 likewise. Would that constitute “substantial further progress” toward the Committee’s maximum-employment and price-stability goals?

assistant: Yes. Well, so we’re not—we’re not going to be identifying specific—associating that test with, with specific numbers at this point. So, really, the question is, what do we mean by, by that language? And, really, the overarching message, Rich, is that our guidance for both interest rates and asset purchases will keep monetary policy accommodative until our maximum-employment and price-stability goals are achieved, and that’s, that’s a powerful message. So “substantial further progress” means what it says. It means we’ll be looking for employment to be substantially closer to assessments of its maximum level and inflation to be substantially closer to our 2 percent longer-run goal before we start making adjustments to our purchases. I would also point out that by increasing our asset holdings, we see ourselves as adding policy accommodation. There will come a time when the economy does not require increasing amounts of policy accommodation. And when that time comes—and that will be uncertain and, in any case, is, is some ways off. So I can’t give you an exact set of numbers. We will—of course, as we approach that point, we’ll be evaluating that. And when we see ourselves on a path to achieve that goal, then we will—we will say so undoubtedly well in advance of any time when we would actually consider gradually tapering the pace of purchases.

user: Very quickly on, on that. You, you mentioned the next couple months are going to be very challenging. And regarding asset purchases, why not increase the duration of the asset purchases at this time, given what you see as a very challenging period ahead?

assistant: So, you know, again, I would start with what we actually did at the meeting, which, which was, we provided this, this guidance about the path of asset purchases. And I just went through what, what they—what they—the guidance that we put forward. And, you know, so I guess since September we’ve now adopted a flexible average inflation-targeting framework. We have provided rate guidance that is tightly linked to the goals as expressed in that new framework. And now we’ve done the same for, for asset purchases. So, you know, we’ve, we’ve been sort of—as, as the future has become clearer and as we’ve absorbed new developments in medical—in the medical sphere and also in, in the economy, we have—began to be able to see further. So we’ve, we’ve started to be able to provide further important guidance. And we think that the—that the asset purchase guidance, guidance is very important. We think that the, the prior language of “in coming months” was obviously temporary. This links that guidance, those purchases, to actual “substantial further progress” toward our, our mandated goals. We think that’s important. And we think is important to have done. I, I would just add, though, that we also continue to think that our current policy stance is appropriate. We think it’s providing a great deal of support for the economy. Financial conditions are highly accommodative. And, you know, we monitor a range of financial condition indexes. There are many of them, and they’ll, they’ll all pretty much tell you that. You can—you can also look at the interest sensitive parts of the economy—for example, housing, durable sales, vehicle sales—those parts of the economy are, are performing very, very well. The parts of the economy that are weak are the service-sector businesses that involve close contact. Those are not being held back by financial conditions, but rather by the spread of the virus. And I’ll close by, by just saying, we do have the flexibility to provide more accommodation through the channel you mentioned and through other channels. And we recognize that circumstances could shift in a way that warrants our, our doing that, including by adjusting purchases. We are committed to using our full range of tools to support the U.S. economy to achieve our goals. We will continue to use our tools to support the economy for as long as it takes until the job is well and truly done. No one should doubt that.