How Fed Chair Powell's Comments Moved Markets

Jay Powell, Chair of the Federal Reserve, testified before the House Financial Services Committee, discussing potential rate hikes. He suggested a 25 basis point increase at the March meeting, with the possibility of more aggressive hikes if inflation remains high. The equity markets reacted positively, viewing the comments as dovish, while bond yields rose significantly. The bond market has been adjusting in response to Powell's commentary, reflecting changes in market expectations.

What did Jay Powell suggest regarding the federal funds rate at the upcoming March meeting?

• A 50 basis point rate hike

• A 25 basis point rate hike

• No change in the rate

• A decrease in the rate

How did the equity markets react to Jay Powell's comments?

• They were indifferent

• They viewed it as hawkish

• They breathed a sigh of relief

• They panicked

What was the bond market's reaction to Powell's testimony?

• Yields were unaffected

• Yields decreased significantly

• Yields remained stable

• Yields increased

What recent event was mentioned as having influenced market movements?

• The war in Ukraine

• The COVID-19 pandemic

• The US presidential election

• Brexit negotiations

What role did the bond market play in response to Powell's comments?

• It ignored the comments

• It adjusted proactively

• It followed the equity market

• It caused a market crash