Powell's testimony - key takeaways

4:31 PM 8 March 2023

Fed Chair Powell started the second session of semi-annual testimonies before Congress. Below we will present some key takeaways from  the Q&A session: 

  • I stress that no decision has been made on the pace of rate hikes.

  • The terminal rate is likely to be higher than we expected.

  • The extraordinary strength of the jobs report and the inflation report both pointed in the same direction.

  • We have not made a decision about the March meeting and it is data dependent.

  •  We have critical information before the March meeting.

  • No one should believe the Fed can protect the economy in the event of a debt default.

  • Congress would have to approve retail CBDC

  • We've had our eyes on the whole housing inflation thing from the beginning

  • Regarding the transitory mistake says 'if we ever see this pitch again, we'll know how to swing at it'

  • The cost of failure to control inflation would be extremely high

  • China faster reopening isn't expected to be a big net effect on the US

  • We expect China's impact to be moderate overall

  • Notes that oil prices could be affected by China reopening and notes that it's more of a concern for Europe

  • Lower housing inflation is a big reason everyone thinks inflation will go down

US500 rebounds from daily lows and approaches psychological 4000 pts level. Source: xStation5

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