Fed Chair Powell testifying to House on Wednesday. What investors are expecting

Jerome Powell, the Chair of the Federal Reserve, will testify before Congress this week.

Markets are eager to hear his views on interest rates and inflation, which will impact monetary policy for this year.

In the past few months, the Fed has become more cautious, as inflation remains a concern despite signs of improvement.

The markets have adjusted their expectations to this, but are still looking for clarity on when rate cuts may begin.

Powell’s testimony will provide insights into the Fed’s assessment of inflation.

He is expected to emphasize that while progress has been made, inflation is still a risk and rate cuts will happen in the future.

Market volatility this week reflects concerns about interest rates and the outlook for tech stocks.

Powell must provide guidance without rocking the markets or alarming policymakers.

Economic factors considered include a softening labor market and speculative activities like the cryptocurrency surge.

The Fed needs to balance addressing concerns over inequality with maintaining inflation and financial stability.

Powell faces political pressure as well, with calls from some politicians to start cutting rates.

He must build a strong case for the Fed’s cautious approach to avoid criticism or accusations of bias.