A hawkish Jerome Powell rains on Wall Street's parade

A hawkish Jerome Powell rains on Wall Street's parade

Not nice, Mr. Powell! S&P 500 futures were up 0.2 percent at 2,719.

"The market understands it", he said.

For the most part, in his prepared remarks Powell struck all the right notes.

The gap between short-dated US borrowing costs and those in Germany was at its widest in over 20 years as the monetary policy outlooks by the Fed and European Central Bank for the two regions diverged.

The dollar is trading at a five-week high of 90.60 versus a basket of currencies.

Powell also added further gradual increases in the federal funds rate will be the best policy stance.

"We continue to expect solid rates of private consumption throughout 2018 as the effects of the tax plan gradually phase in", Michael Gapen, chief USA economist at Barclays PLC, said in a note.

Powell will generally continue the gradual tightening. The Fed Chair later admitted that he was not amused by the labor force participation rate, 'Our labor force participation not even at the median of comparably wealthy countries he reasoned, '...the evolution of technology, and flattening out of United States educational attainment as potential causes.

Investors are eagerly waiting for the second congressional testimony of the new Fed Chair Jerome Powell on Thursday morning. And at the December meeting, the median participant called for three rate increases in 2018.

Powell noted that in December the balance of opinion on the Fed's policy-making Open Market Committee was for three rises in 2018.

California Democratic Party doesn't endorse Feinstein re-election bid
Senate in a special election in 1992, and she has since been re-elected to four full consecutive terms. The top two vote-getters advance to the November general election, regardless of party.

"At this point we do not see these developments as weighing heavily on the outlook for economic activity, the labour market and inflation". "We also saw a big increase in employment, which bodes well".

The quality that market players value in a Fed chair, above all, is predictability, and Powell passes mustard on that front, too. "I wouldn't want to prejudge that new set of projections, but we'll be taking into account everything that has happened since December".

An unconventional President Trump made the conventional choice in Powell, Johnson said. But our impression is that he hinted that the fourth hike is definitely on the table.

The first line of defence for the corporate elites is the trade union bureaucracy, but if that fails, then the Fed has indicated it stands ready to use the weapon of higher interest rates.

One of the key aspects of Powell's question-time comments was his view on the "continuing strength in the labour market". The U.S. dollar strengthened and the gold prices declined, as one can see in the chart below. Prices have fallen about 1 per cent so far this week.

It may be just a short-term move. The Australian dollar dropped after business investment unexpectedly fell in the final three months of a year ago. It should be supportive for the greenback and negative for gold.

February sales of US Mint American Eagle gold coins fell 80 per cent from the same month a year earlier, the slowest February sales in 11 years, while February silver coin sales fell to the lowest since 2008, government data showed on Wednesday.

Powell said he would consider having the Fed board vote on the San Francisco-based bank's plan for addressing shortcomings outlined in the enforcement action after Warren said his intention to have staff do the assessment "is not good enough".

Some analysts said Powell retreated slightly from the hawkish comments made on Tuesday, probably recognizing the impact he made on stocks and USA yields earlier. It's free and you can unsubscribe anytime.

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