Federal Reserve Chair Jerome Powell to testify next week

Federal Reserve Chair Jerome Powell will testify before two committees next week. The main concerns will probably center on whether or not the Fed’s more pronounced rate increases will cause the US economy to enter a recession. Incidentally, nine of the last 12 cycles of interest rate increases by the Federal Reserve since the 1950s have resulted in recessions. The National Bureau of Economic Research (NBER) is the official agency to declare a recession if it happens.

On Tuesday, March 7, at 10 AM, Powell will give a testimony on ‘The Semiannual Monetary Policy Report’ to Congress at the Hart Senate Office Building 216. The Committee on Banking, Housing, And Urban Affairs will meet in an open session, hybrid format to conduct a hearing in which Powell will be the witness.
On March 8, Wednesday at 10 a.m. ET.

Federal Reserve Chair Jerome Powell will appear before the House Financial Services Committee at 2128 Rayburn House Office Building, regarding the central bank’s semiannual monetary policy report.

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The testimony is typically presented in two parts in which the first is a prepared statement, and the second is a question-and-answer session with the committee. The stock market may experience significant volatility during the Q&A section of the hearing.

Also Read: Fed officials’ hawkish stance; market expects policy rate to peak at 5.5% in September

Back in June 2022, Jerome Powell wrapped off his two days of testimony before Congress by addressing House members. Since then, the US Fed has been raising rates to tame inflation. Powell has been seen saying that the Fed is strongly committed to bringing inflation back down, and they are moving expeditiously to do so. Powell has acknowledged the hardship high inflation is causing and the economic pain associated with it.

The US Fed has already hiked rates by 450 basis points from the near-zero rates seen last year. However, inflation, which has fallen from a high of 9.1% to 6.4% seen in January, is still far away from the Fed’s target of 2%. The next set of US CPI data comes on March 14 and the Fed FOMC meeting takes place on March 21-22.

Markets, meanwhile, will be keenly looking at not only what Fed’s Powell has to say about inflation and rate hikes but also how the macro data arrives in the months ahead.