WHEN: Today, Thursday, March 2nd
WHERE: CNBC's "Squawk on the Street"
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Federal Reserve Governor Jerome Powell and CNBC's Steve Liesman on "Squawk on the Street" (M-F, 9AM-11AM ET) today, Thursday, March 2nd. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000597812 and http://video.cnbc.com/gallery/?video=3000597817.
All references must be sourced to CNBC.
POWELL ON POTENTIAL FOR A MARCH RATE HIKE
The economy has behaved pretty much as we expected. In the meantime, the balance of risks, which has been to the downside in recent years, has really shifted to being even and perhaps lifted to the upside because of the possibility and the likelihood of some fiscal action. So you put all that together, and I think the case for a rate increase in March has come together, and I do think it's on the table for discussion.
POWELL ON ECONOMIC MOMENTUM
Momentum in the economy is solid. We've had two percent growth. At the beginning of this year, I think I was looking at two percent growth and continued progress in the labor market, inflation continuing to get back up to two percent. And I see us as broadly on that path. You really can't be too attentive to short term movements in GDP. We don't measure GDP particularly well in real time. So you've got to look at it in terms of quarters and halves and full years. And I do think we are right where we need to be.
POWELL ON GLOBAL GROWTH
For the last few years, we've really had significant global risks and weak growth abroad. And I think that the risks have diminished and actually growth in Europe is a little stronger. Inflation is a little higher. Same is true in Japan. So we see a slightly brighter picture abroad and I think that will help us.
POWELL ON WAGES
There are probably pockets of slack existing in things like people working part time for economic reasons. They're probably people hanging around the edges of the labor market who are not counted as unemployed but who can come back in in a stronger market. So I think you look at the behavior of wages really to tell you how tight the labor market is. Wages are ticking up, but they're not ticking up a lot. It's quite a gradual thing. It suggests to me there's probably still some slack.
POWELL ON THREE RATE INCREASES THIS YEAR
I wrote down three rate increases in the September summary of economic projections. That still feels about right to me. That's a gradual path by any historic measure. And it does feel to me that is about right, but it is really going to depend on what the economy does. Could be higher, could be lower.
POWELL ON THE BALANCE SHEET
The balance sheet tool was deployed when we are at the zero lower bound during the height of crisis and thereafter. And that's for extraordinary circumstances. So I'd really like to see us get well above zero, well into the normalization process, before we start shrinking the balance sheet because shrinking the balance sheet is a way of removing accommodation. So I'd like to be well away from that, and I would say that's going to take a little bit of time in my thinking. And then when we do go to shrinking the balance sheet, we can do it in a very predictable almost automatic way.
POWELL ON TRUMP
I have no concerns. I'm looking forward to meeting new colleagues and I look forward to meeting people. And I'm eager that there be a vice chair for supervision as soon as possible so I can begin to work with that person.
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