Powell Acknowledges Fed Could Have Ended Covid-Era QE Sooner
Federal Reserve Chair Jerome Powell acknowledged skepticism around the central bank's large-scale asset purchases during the pandemic.
The Fed likely "should have stopped" sooner, but fell short of admitting that the purchase of MBS' contributed to housing disparities.
Powell reflected on the central bank's aggressive asset purchases during the COVID-19 pandemic, acknowledging it may have been an overreaction.
- Powell said the Fed likely "should've stopped asset purchases sooner," specifically pointing to mortgage-backed securities.
- Powell acknowledged previous skepticism from market watchers who questioned the inclusion of agency MBS purchases during the pandemic recovery.
Powell said 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 summary: Fed Chair Powell admits to possible overreaction.
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