Powell answers questions
- New guidance is powerful
- Employment will need to be 'substantially' closer to full employment
- Lowering bond buys 'is some ways off'
- When we see that progress we will say so 'well in advance' of tapering
- We feel like our purchases, right now we're providing a great deal of stimulus
- Any time we feel more purchases will help economy, we will do it
- Doing a BOC-style twist where they lower purchases but extend maturity 'isn't high on our list' of possibilities
- The case for fiscal policy action is "very, very strong"
- My expectation is H2 2021 US economy will be strong
- Some of the demand for housing may be pent-up
- Many homebuilders we met with said they've never seen anything like it
- Housing prices aren't a financial stability concern
- We're aiming for an inflation overshoot but it will take some time to get there. Would it really shift the timeline by changing composition of asset purchases?
- Markets have found the Fed credible on the new inflation framework, I'm pleased by how markets have moved
- We do have the ability to buy more bonds and the day to use it may come
- 'We remain open' to increasing purchases or moving to longer maturities but we think current stance is appropriate
- We think our guidance today will provide support
- It looks like at this time that what is needed is fiscal policy
It's fanciful to think that the Fed would ever nail itself down with action tied to hard numbers.
On inflation, he indicated that the Fed would look through a jump in 2021 inflation.
