Federal Reserve Chair Jerome Powell said Wednesday models at the central bank suggest its "quantitative tightening" program could continue for about two years before a new equilibrium is reached in the level of reserves.
"The process of getting back down to the new equilibrium will take awhile," said Powell about reaching a minimum level of reserves in response to a question from MNI. "It's hard to be precise, but you know, the model would suggest that it could be between two, 2-1/2 years." In March, Chair Powell said the QT program could take around three years.
Powell expressed confidence about the QT program that will ramp up in September. "By all assessments, the markets should be able to absorb this and we expect that'll be the case. So, I'd say the plan is broadly on track," he said.