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, but the pace of purchases was set to avoid a sharp tightening of financial conditions.
Powell reflected on the central bank's actions at the National Association for Business Economics conference, specifically pointing to mortgage-backed securities (MBS) purchases.
- The Fed's purchase of MBS and U.S. Treasury securities was intended to prevent a sharp unwelcome tightening of financial conditions.
- Powell acknowledged previous skepticism from market watchers who questioned the inclusion of agency MBS purchases during the pandemic recovery.
Author's summary: Powell admits the Fed could have ended Covid-era QE sooner.
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