DXY Falls On Powell's Testimony Before Senate Banking Committee

Javier Stokes
March 3, 2018

The current Fed chief will have a chance to clarify his views when he goes before a Senate panel on Thursday.

Powell's comments on his personal outlook "was basically like him saying, 'my dot is going up, '" said Tim Duy, an economics professor at the University of OR, in contrast to Bernanke and Yellen who felt they should never reveal their own "dots".

"There's no evidence that the U.S. economy may be overheating", Powell said during a Senate Banking Committee hearing. "While many factors shape the economic outlook, some of the head winds the United States economy faced in previous years have turned into tailwinds".

The core index, which Fed officials see as a better indicator of underlying price pressures because it excludes often-volatile costs for food and fuel, was up 0.3 percent in January - the most in a year - and 1.5 percent from January 2017, the same annual gain as the previous three months. "Powell is closely associated with the dovish policies of the last number of years and he has publicly been quite supportive of those policies which have been an elixir for the financial markets".

Comcast fell 7.4% after the U.S. cable giant offered to buy Sky for $31 billion in an unsolicited approach, taking on Rupert Murdoch's Fox and Bob Iger's Walt Disney in the battle for Europe's biggest pay-TV group. African Americans and Hispanics (at or below pre-recession rates).

"In late January, stocks and bonds were declining together as fears of higher interest rates impacted risk appetite".

Yields on 10-year government bonds ended lower at 7.72% compared to Tuesday's close of 7.67%.

Oil prices eased 57 cents a barrel to $61.07 U.S.

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Still, for all her difficulties, she has appeared to be in a dominant position leading into the June 5 primary with Mr.de León. But, the California Democratic Party was not in favor of making her as a candidate to fight against the Republicans this time.

The Fed's Money supply for the week will be released at 4.30 pm ET.

The market sentiment suffered a jolt after other Asian markets closed with widespread losses and European markets dropped in early trade, tracking a slump in the US stocks overnight after the US Fed chair revived worries about a sharp increase in interest rates.

Inflation has mostly missed the central bank's 2 percent target since 2012, though policymakers expect it to rise toward their goal. For that reason, he said, the Fed does not feel it needs to speed up the pace of benchmark policy rate increases.

Hawkish or dovish? That's the question that many market watchers and investors have been wondering about newly appointed Fed Chair Jerome Powell and his approach to the Federal Reserve's monetary policies as the head of the Federal Open Market Committee (FOMC).

But the talk of a slight rise in the interest rate did not cause a panic in the stock market.

Given the positive attitudes among business and strong sales growth, the business investment is likely to continue to increase. "You saw some reaction, but not a dramatic one". Still, "inflation remains below our 2 per cent longer-run objective". His comments today were very similar to his testimony on Tuesday. This has made the Fed the market safety net over the last several years, but what did Powell say that might signal, as Bob Dylan sings, "the times are a-changing".

"He said it's his impression the economy was getting stronger, which subtly gave the indication that he was going to raise his personal forecast for four rate hikes this year, and that's what the market reacted to", said Michael O'Rourke, chief market strategist, JonesTrading in Greenwich, Connecticut.

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