Fed's Powell testifies in the House of Representatives
The testimony from Fed's Powell begins in front of the Senate banking committee.
Some levels at the start of his testimony:
- Dow +78.64 points at 33970
- S&P -0.43 points at 4386.13
- NASDAQ index -98.89 points at 13653.13
- Gold up $0.30 at $1928.65
- Crude oil of $1.06 at $111.67
- Bitcoin $43,168
- 2year yield 1.528%
- 10 year yield 1.875%
- EURUSD 1.1072
- GBPUSD 1.3356
- USDJPY 115.58
- USDCHF 0.9190
- USDCAD 1.2639
- AUDUSD 0.7340
- NZDUSD 0.68033
Headlines from Fed Powell's testimony
- We need to be alert and nimble in making fed decisions
- Rising energy prices will work its way through the US economy
- There will be upward pressure on inflation for a while
- We could see people holding back on spending in the United States.
- This is a great labor market for workers.
- Problem we are facing as high inflation.
- Restoring price stability is the single most important thing we can do.
- I strongly share view that everything we do in fed system needs to be linked to mandate
- For the most part real wages are declining. That is why we have to get inflation under control.
- In hindsight we should have moved earlier to see inflation as longer-lasting.
- "Yes" when asked if he is prepared to do what it takes on inflation
- Sanctions make it difficult for Central Bank of Russia to support the ruble
- An unexpected byproduct of Ukraine war is it will not help with supply chains.
- We have not seen much relief on supply-side
- There is no problem with labor demand.
- We have a labor supply problem.
- Getting past supply chain problems would help on inflation.
- Additional inflation pressure does raise risk of inflation expectations rising. Concern is already lots of upward inflation pressure and this raises risk that could influence inflation expectations.
- Over the course of this year, the Fed will raise rates and allow balance sheet to shrink
- Powell says that he supports a 25 basis point rise in March
- Prepare to raise by more than that in meeting or meetings if inflation doesn't come down.
- Inflation is too high. The Fed will use old tools to bring it down
- Right now we have substantial excess demand.
- Labor market is overheated.
- There is a lot we can do to bring demand down without risking damage.
- Hope to bring economy to level where demand and supply are in sync.
- A $10 rise in oil is about 0.2% on inflation as a rule of thumb
- Fed really doesn't want a wage price spiral.
- We don't want inflation to be entrenched or self-perpetuating.
- Wage increases have been very highest particularly on the lower end
- At next meeting we will set a pace for balance sheet runoff
- We like to have caps so runoff is not volatile.
- Will set runoff so it won't disrupt markets.
- Energy prices will depend on events, will push up inflation in near-term, also effects on growth it all comes down to how persistent energy price is
- To get back to 2% inflation, will need help from supply-side bottlenecks
- We will keep in mind some of the inflation is a strong demand meeting in flexible supply
- We can lower car demand by raising rates and will do that, but ultimately need more semi conductors to get car supply up
- We are on an unsustainable fiscal path. Time to do that is when the economy strong
The testimony ended at 12:25 PM ET.
