Global investors are keeping a close watch on Federal Reserve Chair Jerome Powell’s testimony to the Congress this week. On Wednesday, Fed Chief Powell delivers semi-annual congressional testimony before the House Financial Services Committee, and on Thursday, Powell delivers semi-annual testimony to Congress before the Senate Banking Committee. This week’s speakers will also include James Bullard, president of the Federal Reserve Bank of St. Louis, as well as his equivalents in New York and Chicago.
On June 21, Wednesday at 10:00 a.m., Chair Jerome H. Powell testimony will be before the U.S. House Financial Services Committee where he will submit the Semiannual Monetary Policy Report to Congress. Governor Lisa D. Cook and Governor Philip N. Jefferson will also testify (Nomination Hearing) before the U.S. Senate Committee on Banking, Housing, and Urban Affairs on Wednesday
On June 22, Thursday at 10:00 a.m., Chair Jerome H. Powell testimony will be before the U.S. Senate Committee on Banking, Housing, and Urban Affairs where he will submit the Semiannual Monetary Policy Report to Congress. Speeches of Governor Christopher J. Waller and Governor Michelle W. Bowman will also be on the same day.
“Global investors are keeping a close watch on Federal Reserve chairman Jerome Powell’s testimony before the Congress where he will submit the Semiannual Monetary Policy Report. It will be interesting to see Powell’s view on the future trajectory of interest rates, considering that inflation levels continue to surpass the Federal Reserve’s annual target of 2% and the labor market remains relatively constrained compared to historical norms,” says Shrey Jain, Founder SAS Online, India’s Deep Discount Broker.
In order to assess how the economy is responding to increasing borrowing costs and recent banking stress, the Fed decided to take a break after 10 straight rises in interest rates. Powell is expected to be questioned about this decision. Many found the decision perplexing given that the benchmark rate is expected to increase to 5.6% by year’s end from the policymakers’ March projection of 5.1%, according to their most recent median forecast.
Democrats may thank the Fed for taking a break and caution Powell against raising interest rates too quickly, which might result in millions of Americans losing their jobs. The idea that inflation is still too high and hurting individuals and small-business owners might be hammered home by Republicans.
Meanwhile, US stocks bull market rally witnessed in SP500 and Nasdaq 100 is facing uncertainty. As the Federal Reserve’s interest rate policy becomes more unpredictable, US traders are torn between the rally’s allure and their worry that the market has reached an overbought condition.
The US Fed had paused rate hikes in the FOMC meeting that took place on June 13-14 but issued a warning about additional tightening to come.
Forecasts for higher borrowing rates of 5.6% in 2023 were included in the decision last week, which means there will be two more quarter-point rate hikes or one half-point hike before the year is out. The next US Fed meeting is on July 25-26. And, before that the crucial inflation data for June 2023 are scheduled to be released on July 12, 2023.