Powell: QE taper likely "well before" interest rate increase

The Federal Reserve will reduce its bond purchases before it commits to an interest rate increase, Fed chair Jerome Powell said on Wednesday.

“We will reach the time at which we will taper asset purchases when we have made substantial further progress towards our goals from last December,” Powell said in comments to the Economic Club of Washington. “That would in all likelihood be before, well before, the time we would consider raising interest rates. We have not voted on that order but that is the sense of the guidance.” A decision on whether the balance sheet would subsequently be allowed to shrink has not been made yet, Powell said.