Powell says U.S. Fed could start tapering asset purchases this year

U.S. Federal Reserve (Fed) Chair Jerome Powell said on Friday that it could be appropriate for the central bank to start tapering asset purchases this year.

"My view is that the 'substantial further progress' test has been met for inflation. There has also been clear progress toward maximum employment," Powell said in a speech during the Federal Reserve Bank of Kansas City's annual Jackson Hole economic symposium.

The Fed has pledged to keep its benchmark interest rate unchanged at the record-low level of near zero, while continuing its asset purchase program at least at the current pace of 120 billion U.S. dollars per month until "substantial further progress" has been made on employment and inflation.

The minutes of the Fed's July meeting showed that most Fed officials indicated it was appropriate for the central bank to start tapering asset purchases this year, but no decisions regarding asset purchases were made at the meeting.

"I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year," Powell said.

"The intervening month has brought more progress in the form of a strong employment report for July, but also the further spread of the Delta variant. We will be carefully assessing incoming data and the evolving risks," he added.