Powell voiced concern in 2013 over QE

WASHINGTON • U.S. Federal Reserve chairman Jerome Powell voiced concern that the central bank’s bond purchases were distorting financial markets and pushed for an early start to reducing them back when he was a governor in 2013, transcripts of meetings that year show.

Powell, who took over as chair in February 2018, had advocated beginning to scale back the Fed’s quantitativeeasing program as early as June of 2013, according to the record of policy-makers’ conversations released Friday with their customary five-year lag.

The central bank didn’t actually begin to cut back its purchases until December, after the markets were spooked in the middle of that year by hints the plan would start sooner — the socalled taper tantrum.

The release of 2013 transcripts comes as the Fed presses ahead with an ongoing reduction of its bond holdings by a maximum of US$50 billion per month.

Some critics have charged that the strategy has led to turbulence in the financial markets by suggesting that the Fed will push ahead with tightening monetary policy regardless of the economy.