Federal Reserve press conference, 2020-03-15 — Chair Jerome Powell

Question (Michael McKee, Bloomberg): Thank you, Mr. Chairman. I want to ask some timing questions here. First, on the—whatever it is, QE or not QE, you talk in the press release about increase “over coming months.” Is there a timetable for that? How long are we talking about—$700 billion, obviously, over two months is a lot different from $700 billion over the course of a year. And do you have a date where you would reevaluate and perhaps add more or end the program? And the same with the interest rate cut to zero—how long do you think that might last, and would you be inclined to quickly go back to a higher level, the 100 basis points or more that you cut it from? Or would you anticipate that this will be a long, slow process going back? —are we talking about for the QE purchases, and how long do you anticipate keeping rates low, and how fast would you bring them back up again?
Answer: Okay, sorry. So that’s the “in coming months” language. Let me tell you what we were doing there. So there’s no monthly cap here. There's no weekly cap. The Desk is going to go out, and it’s going to buy at a strong rate that is—that we think will restore market function—restore liquidity as quickly as it can be restored. And that language is open ended, and it’s meant to send a signal to the market that—that, you know, we’re not going to be bound by, for example, $60 billion a month or anything like that. We’re going to go in strong starting tomorrow, and we’re going to buy across the curve, and we’re going to buy MBS, and we’re really going to use our tools to do what we need to do here, which is restore these important markets to normal function. So that—that’s really what that is. As far as—as the policy rate, what we’ve said is that we will maintain the rate at this level until we’re confident that the economy has weathered recent events and is on track to achieve our maximum employment and price stability goals. So, you can see, that’s the test we’ve written down. And if you—if you look at it, you’ll see that some things have to happen before we’d consider—we’d have to become confident of—that the economy has weathered these recent events and also is on track to achieve our maximum employment and price stability goals. So that’s a test we’ll be looking at, and I think it suggests that, you know, we’re going to be watching and willing to be patient, certainly.