Powell Acknowledges Fed's COVID-Era QE Could Have Ended Sooner
Federal Reserve Chair Jerome Powell has acknowledged that the central bank's large-scale asset purchases during the pandemic may have been an overreaction.
The Fed likely "should have stopped" sooner,
Powell said, specifically pointing to mortgage-backed securities (MBS). 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's statement reflects on the central bank's aggressive asset purchases during the COVID-19 pandemic, acknowledging skepticism around the inclusion of agency MBS purchases during the pandemic recovery.
Author's summary: Powell acknowledges potential overreaction in Fed's COVID-era QE.
- Federal Reserve Chair Jerome Powell reflected on the central bank's asset purchases during the pandemic.
- Powell acknowledged that the Fed may have acted too slowly in stopping asset purchases.
- The central bank's purchase of MBS and U.S. Treasury securities was intended to avoid a sharp tightening of financial conditions.