Fed chair Jerome Powell sees 'no evidence' of overheating in United States economy

Federal Reserve Chairman Jerome Powell testifies Tuesday before the House Financial Services Committee in Washington.

In February, markets had the worst week since January 2016, and the eighth worst since 2008. Benchmark Treasury yields rose, a sign that investors expect the Fed to tighten monetary policy this year.

"My personal outlook for the economy has strengthened since December", Powell said Tuesday.

"There is always a risk of a recession at any point, but I don't see it as at all high right now", he added.

While it was Powell's first testimony as Fed chairman, he proved adept at deflecting all questions that would put him in risky political waters. The comments renewed investor concerns that increasingly nationalistic governments will impose barriers hurting the global economy and trade. Highlighting improvements in the labor market and "solid" gains in household spending, as well as a recent step-up in business investment, Powell painted a relatively rosy picture of current conditions.

After a couple of weeks of calm, the volatility that kicked off February has returned on worries that the strong United States economy and President Donald Trump's tax cuts will lead the Federal Reserve to tighten borrowing costs more than previously thought. This week's second-round GDP revision showed fourth-quarter growth accelerated at a 2.5 percent. The Japanese yen firmed 0.55 percent versus the greenback at 106.73 per dollar.

When inquired as to whether he would consider influencing the a third-to party audit of Wells Fargo's consistence open, Powell said he couldn't focus on doing as such without talking with his staff. "That is the path we have been on and my expectation is that will continue to be the appropriate path". Looking ahead to the rest of the year, the general consensus is that mortgage rates will continue to rise, potentially reaching past 5%.

Even as Powell's remarks began to soothe nerves, markets got rattled again by fresh comments that New York Fed President William Dudley reportedly made Thursday in Brazil.

In other words, interest rates will have to be lifted in order to cut back economic expansion and increase the jobless rate, so as to put downward pressure on wage demands. Treasury prices and yields move in opposite directions.

Inflation in the 19 countries sharing the euro slowed to 1.2% from 1.3% in January, in line with expectations but far from the ECB's long elusive target of nearly 2%.

More confidence, more money, and more spending should mean higher inflation... It remains below 2%, the level the Fed considers healthy for the economy.

Powell however, may be at odds with at least some of his colleagues. Prices have fallen about 1 per cent so far this week. However, his pointer at the topside potential for both inflation and growth suggests the risks as skewed for a bolder monetory policy response.

All income and expenditure data is important to the Federal Reserve and markets because of the impact it can have on inflation.

The combination of a hawkish Powell and uber European Central Bank hawk Weidmann coming out dovish has convincingly toppled the euro. "I wouldn't want to prejudge that new set of projections, but we'll be taking into account everything that has happened since December".

Traders of futures tied to the Fed's target policy rate stuck to bets on three rate hikes this year and began pricing in a almost one-in-three chance for a fourth rate hike.

The Federal Reserve Chairman spoke little of the number of rates hikes expected this year.

Powell's first appearance before Congress is being viewed as an effort by the new Fed leader to provide assurances that Fed policies are not about to undergo an abrupt change.

Jerome Powell, 65, gave his first congressional testimony as chairman this week. She's a regular guest on CNBC, Bloomberg, Fox News and CNN.

Related news:

Hot News

isis-killer-beheading-video-story-top Arsene Wenger should leave end of season: Former Arsenal star Ian Wright
Mar 02, 2018 - 10:19
It would have been wonderful to win the Carabao (League) Cup and then hopefully backing that up with winning the Europa League. So, Arsenal's season now hangs on the oft-maligned Europa League, in which Wenger has been fielding reserve teams.

isis-killer-beheading-video-story-top Martin Garrix, K-Pop Stars Dazzle At Winter Olympics Closing Ceremony
Mar 02, 2018 - 09:28
Then there was the gold medal for the USA men's curling team, adding to the allure of that peculiar yet captivating sport. Shaun White wins 100 Winter Olympic gold medal . "You're honestly starting to get v clingy and I can't anymore".

isis-killer-beheading-video-story-top Samsung Galaxy S9, Samsung Galaxy S9 Plus First Impressions
Feb 28, 2018 - 23:00
Putting AI and AR technologies to use, Samsung has finally given Bixby the teeth that move it from kiddie's table to the adult's. Samsung has also improved and upgraded its flagship features and its pricing should be about same as Samsung Galaxy S8.

isis-killer-beheading-video-story-top Sony's new flagship phones come with an updated design
Feb 26, 2018 - 16:00
It still has the Snapdragon 845 , though, as well as the 4GB RAM, 19MP camera, fingerprint reader, and stereo speakers. For the front-facing camera, the company is using a 5MP wide-angle lens with f/2.2 aperture that records 1080p videos.