By Greg Robb, MarketWatch
Welcome to day two of Fed Chairman Jerome Powell’s semi-annual testimony to Congress on the outlook for the economy and the central bank’s monetary policy.
On Tuesday, financial markets /zigman2/quotes/210598065/realtime DJIA -1.40% /zigman2/quotes/210599714/realtime SPX -1.34% welcomed Powell’s message of patience in removing the Fed’s easy policy stance even as the economic outlook was getting brighter. The Dow Jones Industrial Average erased sharp losses after his remarks.
Fear of higher inflation has been getting headlines over the past few weeks but Powell said he wasn’t concerned. While prices are bound to be volatile as the economy recovers from the pandemic, The Fed chairman said he didn’t think price gains would be “persistent.” He said the Fed wasn’t concerned with the sharp rise in bond yields because it was tied to optimism about the outlook.
Powell’s prepared remarks are identical to the opening statement he gave to the Senate Banking Committee on Tuesday.
Expect the questioning to begin around 10:30 a.m. Eastern.