Powell Acknowledges Fed's Covid-Era QE Could Have Ended Sooner
Federal Reserve Chair Jerome Powell acknowledged skepticism around the central bank's large-scale asset purchases during the pandemic, noting the Fed likely "should have stopped" sooner.
The Fed likely "should've stopped asset purchases sooner,"
Powell reflected on the central bank's aggressive asset purchases during the COVID-19 pandemic, acknowledging it may have been an overreaction. He specifically pointed to mortgage-backed securities, but fell short of admitting that the purchase of MBS' contributed to housing disparities.
- 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 "in order to avoid a sharp unwelcome tightening of financial conditions.
Author's summary: Powell admits the Fed could have ended Covid-era QE sooner.