Federal Reserve Chair Jerome Powell indicated a forthcoming shift in the central bank's monetary policy, suggesting a potential easing of policy restraint within this year. Powell highlighted that the Federal Reserve is considering slowing the pace of its asset runoff 'fairly soon' to ensure a smooth transition and mitigate risks to money market volatility, with caps unchanged at $60 billion for Treasuries and $35 billion for MBS. He also mentioned that the policy rate is likely at its peak for this tightening cycle, assuming the economy evolves as expected. Discussions around the balance sheet's future, including a longer-term goal of shifting towards primarily Treasury assets, were also noted, though no specific decisions were made during the latest meeting. The Fed's approach aims to avoid market turbulence and ensure financial stability while closely monitoring money market conditions.
Powell Says It’ll Soon Be Appropriate to Slow Pace of QT (The Fed's balance sheet has not been reduced by that much) https://t.co/lUtTmCKacc
Jerome Powell said it will probably be appropriate to start easing. The Fed reiterated its outlook for three 25-bp rate cuts this year, but cut its expectations for 2025. https://t.co/rli78Yl3rY
Fed's Powell says balance sheet drawdown taper coming soon https://t.co/P9ANElW7VL https://t.co/ukVFKpJgU4
🚨🇺🇸 Fed Chair Jerome Powell says it will likely be appropriate to start easing policy restraint this year 👀 https://t.co/2FO41XALqk
Fed’s Powell Says It’ll Soon Be Appropriate to Slow Pace of QT Slowing will reduce chances of stress in funding markets Caps unchanged at $60 billion for Treasuries, $35 billion MBS https://t.co/iJaxMOuqQK
“At this meeting, we discussed issues related to slowing the pace of decline in our securities holdings,” Fed Chair Powell says. “While we did not make any decision today, the general sense of the committee is that it will be appropriate to slow the pace of run off fairly soon.” https://t.co/YED0Vyzx6U
Fed Chair Powell said the central bank has not yet come to a decision on changing the pace of its balance sheet reduction, but “the general sense of the committee is that it will be appropriate to slow the pace of run-off fairly soon.” https://t.co/2u3cUNZRnv https://t.co/8y6VHVHoSJ
POWELL: WE WILL BE MONITORING MONEY MARKET CONDITIONS CAREFULLY TO KNOW WHEN TO STOP ON BALANCE SHEET RUNOFF
POWELL: WE BROADLY THINK THAT ONCE OVERNIGHT REPO STABILIZIES, AS BALANCE SHEET SHRINKS RESERVES SHOULD DECLINE PRETTY MUCH DOLLAR FOR DOLLAR
"We believe that our policy rate is likely at its peak for this tightening cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year," says Fed Chair Powell https://t.co/YZ2RXbuDhW https://t.co/32KwCzdsDN
🔴 FED'S POWELL: WE WILL BE MONITORING MONEY MARKET CONDITIONS CAREFULLY TO KNOW WHEN TO STOP ON BALANCE SHEET RUNOFF.
“We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected it will likely be appropriate to begin dialing back policy restraint at some point this year,” Fed Chair Powell says. https://t.co/EYTOkffrGL
🇺🇸 #FED POWELL: WHAT WE'RE LOOKING AT IS SLOWING PACE OF ASSET RUNOFF - BBG *POWELL: ONE REASON TO SLOW ASSET RUNOFF IS TO AVOID TURBULENCE *POWELL: LONGER-RUN GOAL IS TO RETURN TO MOSTLY TREASURY ASSETS *POWELL: DON'T WANT TO END UP IN SHORT-RESERVES SITUATION AGAIN
🔴 FED'S POWELL: WE BROADLY THINK THAT ONCE OVERNIGHT REPO STABILIZIES, AS BALANCE SHEET SHRINKS RESERVES SHOULD DECLINE PRETTY MUCH DOLLAR FOR DOLLAR.
“We believe that our policy rate is likely at its peak for this tightening cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” Fed Chair Powell says. https://t.co/2u3cUO0pd3 https://t.co/p3yAtrfzl0
POWELL: LONGER-RUN GOAL IS A BALANCE SHEET MOSTLY TREASURIES || SAYS OUR LONGER RUN GOAL IS TO RETURN TO BALANCE SHEET THAT IS MOSTLY TREASURIES
Fed’s Powell: Longer Run Goal Is To Return To B/Sheet That Is Mostly Treasuries - Looking At What Would Be Best Pace And Best Structure $DXY $USDJPY #FOMC
🔴 FED'S POWELL: ONE REASON TO SLOW ASSET RUNOFF IS TO AVOID TURBULENCE.
🔴 FED'S POWELL: THE LONGER-RUN GOAL IS A BALANCE SHEET THAT IS MOSTLY TREASURIES, BUT IT IS NOT URGENT TO DECIDE THAT RIGHT NOW.
🔴 FED'S POWELL: IN TERMS ON TIMING, IN RELATION TO BALANCE SHEET RUN OFF, THERE IS NO MORE SPECIFIC INFORMATION THAN FAIRLY SOON.
*POWELL: WHAT WE'RE LOOKING AT IS SLOWING PACE OF ASSET RUNOFF *POWELL: WOULDN'T WANT TO BE MORE SPECIFIC THAN 'FAIRLY SOON'
POWELL: I DON'T THINK WE KNOW IF RATES ARE GOING TO BE HIGHER IN THE LONGER RUN
POWELL DOESN'T SEE RATES GOING BACK TO ULTRA-LOW LEVELS
POWELL SAYS INSTINCT WOULD BE RATES WON'T RETURN TO VERY-LOW LEVELS
POWELL: WE MADE NO DECISIONS ABOUT FUTURE MEETINGS TODAY; WILL DEPEND ON DATA
JUST IN: 🇺🇸 Fed Chair Powell says it will likely be appropriate to start easing policy restraint this year 👀 https://t.co/qPaixrG2N3
POWELL: SLOWING PACE OF RUNOFF WILL ENSURE SMOOTH TRANSITION, MITIGATING CHANCE OF MONEY MARKET STRESS
*POWELL: DIDN'T MAKE ANY DECISIONS ABOUT FUTURE MEETINGS TODAY will wait for the polling data first
POWELL: SLOWING PACE OF RUN OFF WILL ENSURE A SMOOTH TRANSITION
🇺🇸 *POWELL: APPROPRIATE TO SLOW PACE OF ASSET RUNOFF FAIRLY SOON - BBG
Fed’s Powell: Discussed Issues Related To Slowing Pace Of Decline In B/Sheet Holdings - General Sense Is Slowing Pace Of Run Off ‘Fairly Soon’ - Slowing Pace Of Run Off Will Ensure Smooth Transition - Will Limit Risk To Money Market Volatility $DXY $USDJPY #FOMC
Powell re: QT "appropriate to slow the pace of runoff fairly soon". This is all about avoiding disruption to money markets, but is still a de facto (marginal) easing of monetary policy relative to baseline.
POWELL SAYS APPROPRIATE TO SLOW PACE OF ASSET RUNOFF FAIRLY SOON
POWELL: FED DID NOT MAKE ANY DECISIONS TODAY ON BALANCE SHEET POWELL: BALANCE SHEET RUNOFF TO SLOW "FAIRLY SOON"
POWELL SAYS FED DID NOT MAKE ANY DECISIONS TODAY ON BALANCE SHEET
🔴 FED'S POWELL: ON THE BALANCE SHEET, WE DISCUSSED ISSUES RELATED TO SLOWING PACE OF DECLINE IN HOLDINGS, OUR GENERAL SENSE IS WE WILL START RUN OFF FAIRLY SOON.
🇺🇸 #FED POWELL: APPROPRIATE TO BEGIN EASING 'AT SOME POINT THIS YEAR' - BBG
*POWELL: BELIEVE POLICY RATE IS LIKELY AT PEAK FOR CYCLE *POWELL: APPROPRIATE TO BEGIN EASING 'AT SOME POINT THIS YEAR' Better start by June or else it's election interference
POWELL: OUR POLICY RATE IS LIKELY AT ITS PEAK