Federal Reserve press conference, 2019-05-01 — Chair Jerome Powell

Question (Howard Schneider, Reuters): Hi. Howard Schneider with Reuters. Shifting gears a little bit, I wondered if you could flesh out—I know you’re describing it as a small technical adjustment, but on the IOER federal funds spread, give us a sense of why it matters whether or not this breaches the upper limit a little bit. Is there any feed-through to broader credit conditions and financial conditions that you worry about, or is it simply a matter of the Fed showing that it can control what it says it’s controlling? And I do have a follow-up.
Answer: So a small, temporary deviation outside of the range would really carry no—wouldn’t be important, as your question suggests. But we do think it’s important that we be able to control the federal funds rate and generally keep it within the range. That’s just good monetary policy, good monetary control. So we think it’s important, and we have the tools to do that, so we’ve used them again today. And, again, this is just a technical fix. It really has no implications for policy.

Question (Howard Schneider, Reuters): But as a follow-up on this, it is demonstrating that you can control the market you want to control. And I guess the question is, at what point would these steady declines in the IOER—steady widening of this spread, if it continues, essentially become the policy choice?
Answer: Yes, I mean—so, generally speaking, the federal funds rate—we control only directly the federal funds rate in terms of the market rate. And the transmission of the federal funds rate into other short-term rates—money market rates—has been very good over a long period of time. And that’s important, because it’s really broader financial conditions that matter, not so much precisely the federal funds rate. So I think the Fed controlling the federal funds rate is actually important from that standpoint, and I don’t see us not controlling it. So I think we’ll continue to control it, and it will continue to transmit well into broader financial conditions.

Question (Donna Borak, CNN): Chairman Powell, Donna Borak with CNN. Pivoting a little bit— about wages, since 2010, women’s real earnings have gone up about 3.9 percent compared to men’s, which have risen about 2.1. Do you think the relative increase in women’s wages is a problem for the U.S. economy?
Answer: You know, I think, generally, I’d have to see the data on that. It sounds like you picked a particular time frame. Over time, I really wonder whether that’s the case. You know, I think men and women should make the same for the same work, by and large. So—