Powell urges patience on bond-buying ease

The Federal Reserve is closing in on curtailing the unprecedented bond-buying program that it has used to support the economic recovery...

But Fed Chairman Jerome Powell in a speech Friday was not yet ready to give out the details on when the so-called tapering will begin or by how much.

"We have said that we would continue our asset purchases at the current pace until we see substantial further progress toward our maximum employment and price stability goals measured since last December when we first articulated this guidance. My view is that the substantial further progress test has been met for inflation. There has also been clear progress toward maximum employment."

Powell is urging patience before making a move - only hinting that the Fed will start pulling back sometime "this year."

He's pleased the economy is now producing an average of about 800,000 new jobs over the past three months...

yet is unconvinced the recent surge in inflation is anything but transitory.

But he's been under pressure by members within the Fed to start removing the monetary band-aid sooner rather than later, or risk stoking the kind of inflation that would eventually hurt the economy.

Powell, however, wants to keep playing it safe - especially with the economic impact of the Delta variant surge - now a wild card.

"If a central bank tightens policy in response to factors that turn out to be temporary, the main policy effects are likely to arrive after the need has passed, the ill timed policy move unnecessarily slows hiring and other economic activity and pushes inflation lower than desired."

Powell says if inflation does stay too hot for too long - he's ready to move up the timetable.

His speech was exactly what Wall Street wanted to hear - stock prices and bond yields moved higher in response.

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