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 this was not done.
Powell reflected on the central bank's actions at the National Association for Business Economics conference, specifically pointing to mortgage-backed securities (MBS) purchases. He noted that the pace of MBS and U.S. Treasury securities purchases was set to avoid a sharp tightening of financial conditions.
- The Fed's asset purchases during the pandemic have been subject to skepticism.
- Powell acknowledged that market watchers had questioned the inclusion of agency MBS purchases during the pandemic recovery.
Author's summary: Powell admits the Fed's QE could have ended sooner.