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Photo: Jerome Powell, Federal Reserve Chair

Jerome Powell doesn’t want to talk about scaling back massive Federal Reserve asset purchases—at least not yet—but it’s only a question of time before the discussion resumes. That might not be a bad thing.

The Fed chair told reporters on January 27 that “the whole focus on exit is premature”—a clear call to his colleagues to focus on the economic damage in front of them rather than the forecast for a recovery.

Even so, the world’s biggest bond market is trying to gauge when the U.S. central bank may alter its asset purchases, amid optimistic predictions that fiscal aid and vaccine rollout will boost the economy later this year. Powell’s effort to speak with one voice, after some officials talked about the possibility of a 2021 taper, risks muting other views within the central bank that could help make sure he gets policy right.

“There is this difficulty and tension in how Fed officials are hoping this plays out,” says Matthew Luzzetti, chief U.S. economist at Deutsche Bank Securities.

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