Ok, so we got through the first of two Powell testimonies, and it went ok, all things considered. The message was mildly hawkish on balance and the result for yields, the dollar and secondarily, for stocks, was predictable.
The comments that set the tone came early on when Powell suggested that his outlook on the economy had improved of late and although he said he “wouldn’t want to prejudge” anything about the rate path, he noted that for him, the data “add some confidence to the view that inflation is moving up to target.”
“We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative,” he added.
Treasurys dropped on those comments as 10Y yields quickly moved above 2.90.
Zooming in on 2Y yields just as the comments excerpted above hit, you can really see the impact:
Continue reading They’ve Done Studies You Know…
Ok, here come Powell’s prepared remarks.
If you need to know what to look for here, you can peruse some of the color on today’s closely-watched hearing here, but basically, it’s the same old thing.
People want clues about the outlook and about how fiscal stimulus plays into the committee’s decision calculus and about inflation and, ultimately, about whether we’re likely to get four rate hikes this year.
Powell needs to learn the art of obfuscation and fine-tune his skills at employing euphemisms in the service of not sounding too dovish or too hawkish. Basically, he needs to master the art of using a whole bunch of words to say nothing.
Well speaking of a whole bunch of words, his testimony is out. Here are some (seemingly hawkish) bullet points :
- POWELL: SOME HEADWINDS FACING U.S. ECONOMY ARE NOW TAILWINDS
- POWELL SEES FURTHER GRADUAL RATE HIKES, OUTLOOK REMAINS STRONG
- POWELL: U.S. ECONOMIC OUTLOOK STRONG, INFLATION TO RISE TO 2%
- POWELL: FOMC SEES RISKS ROUGHLY BALANCED, MONITORING INFLATION
And here are some excerpts from the testimony:
Continue reading Jerome Powell ‘Is Pleased’ To Offer You This Half-Assed Janet Yellen Impression