Powell Acknowledges Fed Could Have Ended Covid-Era QE Sooner
Federal Reserve Chair Jerome Powell acknowledged skepticism around the central bank's large-scale asset purchases during the pandemic.
The Fed likely "should have stopped" sooner
Powell reflected on the central bank's aggressive asset purchases during the COVID-19 pandemic, acknowledging it may have been an overreaction. He noted that the pace of the central bank's purchase of MBS and U.S. Treasury securities was set to avoid a sharp unwelcome tightening of financial conditions.
- Powell spoke at the National Association for Business Economics conference
- He pointed to mortgage-backed securities as an area where the Fed could have stopped sooner
Powell's statement acknowledges previous skepticism from market watchers who questioned the inclusion of agency MBS purchases during the pandemic recovery.
Author's summary: Powell admits Fed's Covid-era QE may have been an overreaction.
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