He defined "gradual" was one takeaway
The new Fed Chair concluded his testimony to the Senate Finance Committee. What were some of the takeaways?
- The US economy is near full employment but force participation and wage growth still have some slack. "More strengthening can take place in the jobs market before wage inflation".
- He said early on that there is "No evidence the economy is currently overheating"
- On wages, he did say that he would expect to see more wage hikes and he added "That's what we're waiting to see". He wants to see the whites of the wage gains eyes.
- To prolong the recovery we believe "gradual" hikes is the best course of action
- Then at the very end of the testimony he defined "gradual" by saying 4 hikes would be considered "gradual".
The comments - up until he specifically mentioned the number "4" - was somewhat muted in the stock market. At that point, however, the stocks turned from positive to negative. Yields in the US are near unchanged on the day, but off low levels.
