Powell Signals Federal Reserve Could Slow Bond Purchases This Year

Speaking at a virtual version of the Fed’s Jackson Hole conference, Jerome Powell gave an assessment of the economy in prepared remarks.

Eighteen months into the pandemic, Jerome H. Powell offered the clearest sign yet that the Federal Reserve is prepared to soon withdraw one leg of the support it’s been providing to the economy as conditions strengthen. But the Fed chair made clear that interest rates increases remain far away, and that the central bank is closely watching risks posed by Delta. The Fed has been trying to bolster economic activity by buying $120 billion in government-backed bonds each month, helping to keep many kinds of borrowing cheap, and officials are actively debating when to begin slowing those purchases. They have said they would like to make “substantial further progress” toward stable inflation and full employment before doing so. Mr. Powell, who is speaking at a closely watched conference that the Kansas City Fed hosts each year, used his remarks to explain that he thinks the Fed has made sufficient progress when it comes to inflation, and “clear progress toward maximum employment.”