Powell Says FOMC Did Talk About Balance Sheet Runoff

Q: How much distance should there be before the end of the taper and liftoff? Same as in 2014 (considerable time after the end of the asset purchase program)?

• A: "We haven't made any decision of that nature, I wouldn't say that's our position at all. We did talk today about the balance sheet and we went through the way the sequence of events regarding the runoff and I think people thought that was an interesting discussion. They thought that it was informative but people pointed out that this is a significantly different economic situation that we have at the current time. The difference that we see now would tend to influence how we think about the balance sheet, and the same thing would be true about raising rates."
• "I don't foresee that there would be that kind of very extended wait at this time. The economy is so much stronger. I was here at the Fed when we lifted off last time and the economy is so much stronger now, so much closer to full employment. Inflation is running well above target and growth is well above potential. There wouldn't be the need for that kind of long delay. Having said that, we'll make this decision in coming meetings. It's not a decision that the Committee has really focused on yet."