Powell upbeat
Powell spoke for nearly three-and-a-half hours on Tuesday and will do it again on Thursday. However the market reaction basically came down to a the answer to a single question.
He was asked directly about the path of rates and how that will develop in the months ahead. Specifically, he was asked about the dot plot and if it will rise from the current indication of three hikes.
He was diplomatic and said that he wouldn't prejudge what will happen but he was also overt in listing all the thing he was upbeat about, including better economic data, the tax cut, better global growth, hopes for better exports and others.
The takeaway is that the Fed is shifting to a more-hawkish stance.
Will that be a lasting takeaway? That's a tough one to answer.
Rates have moved up this year and it hasn't given the US dollar a tailwind. The market is increasingly concerned about the twin deficits and upbeat about investments outside the US.
