Powell Acknowledges Fed Could Have Ended Covid-Era QE Sooner
Federal Reserve Chair Jerome Powell has 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 spoke at the National Association for Business Economics conference, pointing to mortgage-backed securities as an area where the Fed could have acted sooner.
- Powell acknowledged previous skepticism from market watchers who questioned the inclusion of agency MBS purchases during the pandemic recovery.
- 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.
Author's summary: Powell admits the Fed could have ended Covid-era QE sooner.