Federal Reserve Chair Jerome Powell said "now is not the time" to be discussing an exit from ultra-easy monetary policy and promised to give plenty of notice before the central bank began to debate scaling back its massive bond-buying campaign.

"We know we need to be very careful in communicating about asset purchases," he said Thursday during a virtual discussion. "Now is not the time to be talking about exit. I think that is another lesson of the global financial crisis, is be careful not to exit too early."

Hopes for a stronger-than-expected recovery have fueled speculation officials could lean toward reducing the pace of bond buying later this year. The Federal Open Market Committee last month pledged to continue to make $120 billion in monthly purchases of Treasuries and mortgage-backed securities until there's "substantial further progress" toward employment and inflation goals.

The vagueness of the guidance has led to differing interpretations among policy makers and investors, who have bitter memories of the 2013 taper tantrum, when the unexpected news the central bank was thinking about reducing bond buying sent yields surging.

Governor Lael Brainard on Wednesday said the pace would be appropriate for "quite some time," though at least four Fed presidents have said a strong economy could prompt discussion of tapering of bonds late this year.

Powell pointedly said the guidance was deliberately not based on any date in the calendar when the Fed would think about paring back asset purchases, aimed at holding down longer-term borrowing costs. But he did promise that there would be ample warning if conditions were getting ripe to consider such a step.

'Let the World Know'

"We'll let the world know," he said. "We'll communicate very clearly to the public and we'll do so, by the way, well in advance of active consideration of beginning a gradual taper of asset purchases."

Powell's comments weighed on front-end U.S. rates and boosted long-end yields, further steepening the curve. Eurodollar futures for 2024, used to wager on where the Fed's target rate will be, were supported, while inflation expectations – as measured by so-called Treasury breakeven rates – climbed and the 10-year yield topped 1.11%. Stocks gained and the dollar largely maintained its decline for the day.

"Powell sure did not sound in a hurry to taper," said Roberto Perli, partner at Cornerstone Macro LLC in Washington. "By not putting a time frame on tapering, the focus stays on what the FOMC said, which is that they need to see substantial further progress to taper, and that represents a high hurdle."

While the Fed chief said he was optimistic about the U.S. economy over the next couple of years, he also spelled out that it had to weather a tough winter.

Around 9 million more Americans are out of work than before the pandemic struck and the virus continues to rage across the U.S. Powell and his colleagues are committed to using all their tools to support the recovery, and last month signaled interest rates will stay near zero at least through 2023.

He reinforced that message Thursday, noting the time to raise rates was "no time soon."