Federal Reserve Chairman Jerome Powell on Wednesday played down any direct link between the central bank’s mortgage bond purchases and rising home prices.

The Fed is buying $80 billion of Treasurys and $40 billion of mortgage related securities each month to support the economy and keep interest rates low.

Many economists have said the Fed should consider slowing down the purchases of mortgage bonds given the national S&P CoreLogic Case-Shiller Home Price Index went up 14.6% in the last year ending in April, the highest rate in 30 years.

In testimony to the House Financial Services Committee, Powell said that was “too much.”

But Powell said the Fed’s bond buying was not to blame and was only “a factor among factors.” Both supply and demand reasons were pushing home prices up, he said.

“Mortgage backed security purchases really work a lot like Treasury purchases. They are not especially important in what is happening with housing prices,” he said.

Powell told the committee the discussions of when and how to taper the bond purchases were were ongoing.

“Those are all issues that we’ll be discussing at our next meeting in a couple of weeks,” Powell said.

In his prepared remarks, Powell said that he thought inflation would moderate and that the economy had not met yet met the conditions for the central bank to start to taper asset purchases.

At the Fed’s last meeting in June, officials were split on whether to reduce the pace of mortgage bond purchases more quickly than Treasurys.

Several Fed officials backed moving on mortgage bonds at a faster pace but other wanted to reduce the pace of Treasury and mortgage bond purchases in equal measures.

The Fed Chairman’s comments suggest he is in the camp of moving commensurately to slow purchases as the Fed did in the last tapering in 2014.

Earlier this week, St. Louis Fed President James Bullard said he was worried the Fed was feeding an incipient housing bubble.

And Fed Gov. Christopher Waller said last month that slowing the Fed’s purchase of mortgage bonds would be a good first step. 

Powell said “the good news” on higher home prices is that “this is not driven by the kind of reckless, irresponsible lending that led to the housing bubble that led to the last financial crisis. Those kinds of things are not happening at least so far.”

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were holding on to moderate gains as Powell’s testimony continued.

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