Powell speech: Fed is discussing slowing pace of runoff

Federal Reserve Chairman Jerome Powell explains the decision to leave the policy rate, federal funds rate, unchanged at the range of 5.25-5.5% and responds to questions in the post-meeting press conference.

Key quotes

"We are seeing a strong labor market, extreme imbalances mostly resolved."

"Wage growth is gradually moderating."

"Things are returning more to the pre-pandemic state."

"Labor market is in good shape."

"We are closely watching layoffs."

"Initial claims are very very low."

"Fed is discussing slowing pace of runoff."

"In terms of timing, no more specific than fairly soon."

"Liquidity is not evenly distributed."

"We might be able to get to a lower level of reserves this time."

"We are looking at what would be best pace and best structure."

"Our longer run goal is to return to balance sheet that is mostly treasuries."

"It is not urgent to make changes to that right now, though; that is an issue further down the line."

"We are going to pay a lot of attention to past mistakes on balance sheet runoff."

"we have a better sense now on indicators we need to look at."

"By going slower on balance sheet, we think we can get further."

"It will mean we run much less risk on liquidity issues."

"We will be monitoring money market conditions carefully to know when to stop on balance sheet runoff."

"There isn't a dollar of % of GDP amount that we have in mind; we will look at indicators to tell us when we are close."

"We want to have a buffer on reserves. We don't want to find ourselves in the 2019 situation again."

About Jerome Powell (via Federalreserve.gov)

"Jerome H. Powell first took office as Chair of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. He was reappointed to the office and sworn in for a second four-year term on May 23, 2022. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System's principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028."