Jay Powell has said the US Federal Reserve is close to agreeing a plan to complete the process of reducing its multitrillion-dollar balance sheet by the end of 2019, teeing up an announcement as soon as its meeting next month.
Speaking to the House of Representatives financial services committee on Wednesday, Mr Powell said “my guess is we’ll be announcing something fairly soon”. He predicted the Fed would be in a position to end the run-off of its holdings of securities “later this year”.
His words will sharpen the financial market’s focus on the Fed’s upcoming March 19-20 policy meeting, as analysts await a detailed road map for its balance sheet. The Fed boosted its asset holdings to $4.5tn following the financial crisis, purchasing Treasuries and mortgage-backed securities in a bid to buoy markets and the US economy.
