The path of U.S. monetary policy will remain "fully data-dependent" in line with the developments of economic growth, unemployment and inflation, and the current large-scale bond purchase program "will continue for some time," a senior Federal Reserve official said Thursday.
U.S. economic recovery will "continue to benefit from the knowledge that the Federal Reserve is committed to supporting growth as long as necessary," U.S. Fed Governor Jerome Powell said at the Washington-based thinktank Bipartisan Policy Center.
Last week, U.S. Fed policymakers painted a brighter picture of U.S. economy.
U.S. Fed Chairman Ben Bernanke jolted global financial market when he said later this year the central bank would start scaling back its massive bond-buying program, the so-called QE3, if the economy improves as expected and may end it by mid-2014 altogether.
"Recent volatility in markets is in part related to concerns about the possibility of a reduction in asset purchases," Powell said.
Asset purchases are being deployed to add near-term momentum to the economy. After the completion of those purchases, the purchased assets will remain on the Fed's balance sheet for some time and continue to put downward pressure on interest rates, he said
