Fed Chairman Jerome Powell today declared the central bank of the United Staes will ‘adjust’ on its balance sheet unwind if conditions warrant. That means as the Fed tries to sop up all the free money it put into the economy, and markets start to go south in a big way, it will restart the pumps.
“While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals,” Powell said in his prepared remarks to the Senate Committee on Banking, Housing and Urban Affairs. “Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year.
“We will carefully monitor these issues as they evolve.”