Powell gave a speech today at Jackson Hole. He had this to say:
“As the economy has strengthened, the FOMC has gradually raised the federal funds rate from its crisis-era low near zero toward more normal levels. We are also allowing our securities holdings–assets acquired to support the economy during the deep recession and the long recovery–to decline gradually as these securities are paid off. I will explain today why the Committee’s consensus view is that this gradual process of normalization remains appropriate. As always, there are risk factors abroad and at home that, in time, could demand a different policy response, but today I will step back from these.”
The Fed will continue to raise rates and reduce their balance sheet. They will be very slow and cautious in doing this. The moment any crisis occurs they will quickly reverse course.