Central Bank Will Begin Reducing Bond Purchases 'Well Before' Raising Interest Rates, Powell Says
By Paul Kiernan
WASHINGTON -- Federal Reserve Chairman Jerome Powell said
Wednesday that the central bank will begin to reduce the pace of
its bond purchases "well before" raising interest rates.
Since last June, the Fed has been purchasing at least $120
billion a month of Treasury debt and mortgage-backed securities to
hold down long-term borrowing costs. Since December, the central
bank has said the economy must make "substantial further progress"
toward its goals of maximum employment and 2% inflation before
scaling back that policy.
"We will taper asset purchases when we've made substantial
further progress toward our goals, from last December when we
announced that guidance," Mr. Powell said in a virtual event held
by the Economic Club of Washington, D.C. "That would in all
likelihood be before -- well before -- the time we consider raising
He reiterated that he thinks it's highly unlikely that the Fed
would raise interest rates this year and noted that most
central-bank officials see rates remaining near zero through
(More to come)
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(END) Dow Jones Newswires
April 14, 2021 13:49 ET (17:49 GMT)
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