Powell’s Testimony Is a Sideshow. Follow the Data.
The Fed chair’s comments sent financial markets lower, but the narrative could change as soon as Friday with fresh jobs numbers.
If you don't like what he’s saying, just wait a few days.
Photographer: Al Drago/Bloomberg
Federal Reserve Chair Jerome Powell sent markets into retreat once again Tuesday with a warning to Congress that interest rates may be heading higher than previously thought. It’s important to remember that he could well change his mind — maybe as soon as this week.
Powell, of course, had the unenviable job of delivering remarks to US lawmakers amid a uniquely uncertain economic backdrop. In late 2022, it appeared that key parts of the economy were moderating in accordance with the Fed’s inflation-fighting goals, and consumer price increases seemed to be cooling. But then data from January suggested that the economy was reaccelerating, and progress on the inflation fight seemed to falter.
As Powell put it on Tuesday: