Federal Reserve Chair Jay Powell testimony on Tuesday - preview
Federal Reserve System Chair Powell will speak on Tuesday 23 February 2021 From 1500 GMT to the US Senate Banking Committee where he'll deliver semi-annual testimony
- Powell will speak the following day to the House Financial Services committee
Some quick comments from analysts, first BNZ:
- He is expected to still run with the playbook of offering extraordinary monetary policy stimulus and encouraging support from the fiscal side
- the opening remarks that get released that day plus sometimes the early stages of questioning that matter.
- If he is asked about reinvestment and if he waffles, then ride the curve steeper yet.
Bank of America:
- will likely note recent progress in the data but reiterate that the economy is far from fully recovered, thereby defending accommodative monetary policy
PGIM Fixed Income (via CNBC interview), on the rise on yields:
- If this testimony was behind closed doors, I think Jay Powell would be quite pleased with what he sees in the economy and the markets. But given that it’s public, he’s got to be careful. If he’s too sanguine about the rise in rates, the markets are going to take that as a significant green light for rates to rip higher.
- The Fed is comfortable with an organic rise in rates reflecting shifts in views on growth and inflation
- But ... the Fed also wants to be careful that it doesn’t create and amplify a self-sustaining dynamic that pushes rates higher for other reasons