Powell: Balance sheet reduction plan could be finalized at next meeting

US Fed Chair Jerome Powell, in his post-FOMC meeting press conference on Wednesday, said that the committee made excellent progress on their balance sheet reduction plan which could be finalized at the next meeting.

Key Remarks:

“By end of this year, policymakers are broadly at, or above, their estimates of the neutral rate.”

“Balance sheet reduction also adds tightening.”

“Wage increases are expected to move back down.”

“We want to slow demand to get it into better alignment with supply to bring down inflation.”

“We are prepared to use our tools as needed to restore price stability.”

“It’s a really attractive labor market for people, we hope that will lead to more labor supply.”

“Raising rates will lead to some tightening of financial conditions and should move to a more normal level.”

“The economy no longer needs or wants very highly accommodative stance.”

“As we tighten policy, or remove accommodation, we expect broader financial conditions to tighten.”

“We made excellent progress on the balance sheet plan.”

“We could finalize the balance sheet plan at next meeting in May.”

“We will be mindful of broader financial context and want to avoid adding uncertainty.”

“Our framework on the balance sheet reduction will be faster than last time.”

“Balance sheet reduction will look familiar to last time though faster.”

“There will be more details on our discussion will be in next Fed minutes.”