#PowellRemarks The Fed slowed the pace of its balance-sheet runoff at its March policy meeting, a move that can work to lower long-term bond yields and led some watchers of the central bank to speculate that policymakers were worried about the amount of liquidity available in the market.

That wasn’t the case, Powell said on Wednesday. “We think reserves are still abundant, " he said. “We don’t think we’re close to a point where we would stop” scaling back the bank’s balance sheet by choosing not to reinvest the money as existing bondholdings mature.

The process is known as quantitative tightening, as opposed to the quantitative-easing approach of buying government debt to boost the economy.

The Fed’s March move was in response to an event involving the Treasury and debt ceiling that “shielded” the Fed from being able to see the impacts of quantitative tightening on its reserves, explained Powell. In response, the Fed slowed its pace.

That ended up being a good thing, said Powell. “The slower we go, the smaller the balance sheet can get without disruptions,” he said.