(Adds quotes) Aug 27 (Reuters) - The U.S. economy continues to make progress towards the Federal Reserve’s benchmarks for reducing its pandemic-era emergency programs, Fed Chair Jerome Powell said on Friday, in remarks that defended the view current high inflation will likely pass and stopped short of signaling the timing for any policy shift. STORY: STATEMENT: MARKET REACTION: STOCKS: The S&P 500 hit a record high BONDS: The 10-year U.S. Treasury note yield extended a drop FOREX: The dollar index fell COMMENTS: GENNADIY GOLDBERG, INTEREST RATE STRATEGIST, TD SECURITIES, NEW YORK “I think the message is clear for Treasuries -- it’s status quo and watch the data. Really, the data over the next month or two will determine the actions the Fed takes. So if we get a very strong payrolls report for example next month it could suggest that tapering could happen sooner. If the data starts to moderate, and not just the payrolls -- on inflation, on activity -- we could actually see the Fed move a little bit later. It’s more of a question of when not if. We know tapering is coming, it’s just a question of when that tapering will become appropriate.” ART HOGAN, CHIEF MARKET STRATEGIST, NATIONAL SECURITIES, NEW YORK “Very anticipated commentary today… not going to announce the exact cadence or timing but we’re certainly going to hear that we’ve made substantial progress and that this year is when we kick (taper) off. Markets are getting exactly what they anticipated and therefore trying to claw back from yesterday’s losses. This has been a very transparent Fed and we’ve heard a lot about the potential for tapering of asset purchases and today is pretty much as we expected.” “Powell has done a very good job of not surprising us. We’ve been talking about (tapering) for a bit. Most Fed speakers have made it a part of their conversation and that’s taking out the surprise out of the tantrum. It removes the potential for a tantrum. It is a very well telegraphed move and that sort of alleviates any pressure of surprising markets.” “(Tapering) will probably (be announced) in the September meeting and they’ll probably kick it off in November and it will likely be wrapped up in the first half of next year.” “They are likely to raise interest rates in the back half of 2022. It’ll certainly be as very well telegraphed as the taper has been. They’ll start talking about interest rate changes in the mid-year, when they would have wrapped up tapering at that juncture.” MICHAEL BROWN, SENIOR ANALYST, CAXTON, LONDON “I think it was a little bit of a damp squib to be honest, especially given that the market had been so eagerly anticipating Jackson Hole for months. The remarks were, broadly, a repeat of the July FOMC minutes, though with the language around tapering still heavily caveated.” “Powell has, simply, punted to September, at which point we may get more of a firm signal on how tapering will pan out, though the lack of any firm nod to tapering today means a September taper announcement is highly unlikely.” “The (FX) market has interpreted Powell’s remarks as a little more dovish than expected, though I think there is plenty ‘selling the fact’ going on, after a week of building up hawkish positions.” KIM FORREST, CHIEF INVESTMENT OFFICER, BOKEH CAPITAL PARTNERS, PITTSBURGH “Powell understands that tapering will happen, but it’s not going to happen sooner than later. He’s going to make sure that full employment comes back before taking those steps.” “Even though a lot of the other Fed presidents have come out and said ‘we’re going to do this sooner rather than later, prudent Powell is going to make sure that the economy really is healed. You don’t want to make people carsick when you’re driving an economy.” JOHN DOYLE, VICE PRESIDENT OF DEALING AND TRADING, TEMPUS INC., WASHINGTON “It appears the speech was a bit more dovish than some had expected.” “Powell said that tapering could be appropriate “this year.” Except we already knew that. Minutes from the last Fed meeting showed that “most” participants favored tapering this year. Powell did not indicate tapering would being next month as some expected, hence the “dovish” label.” “If easing stays in place longer, that is good for stocks and bad for the dollar so the market moves all make sense so far.” (Reporting by Reuters markets team) Our Standards: The Thomson Reuters Trust Principles.