From the WSJ's MoneyBeat blog:
Wall Street has had a long list of questions for new
Federal Reserve Chairman Jerome Powell since his nomination last
November. It may finally be about to get some answers.
Minutes from the Fed’s last meeting, on Jan. 30-31, are due out
Wednesday afternoon. Those are expected to shed light on the last
conclave under the stewardship of former Chairman Janet Yellen, but may
also offer some early hints about how her successor is thinking.
“The FOMC minutes should give financial markets a good idea of the
tone of Chair Powell’s formal remarks,” said NatWest Markets economists
in a research note.
Even stronger clues on his thinking about everything from tighter
monetary policy to U.S. inflation are likely to come from Mr. Powell’s
first testimony as chair before Congress next week, as The Wall Street
Journal’s Morning MoneyBeat newsletter noted on Wednesday.
Mr. Powell previously has stressed continuity and indicated he will
maintain the slow-and-steady approach toward interest-rate moves that
Ms. Yellen stuck to during her four years at the helm.
The worry among many investors is that the Fed turns more hawkish as
the U.S. economy and inflation begin to pick up after years of
sluggishness. “The most likely surprise in the Fed minutes…is that they
may be leaning to four hikes in 2018,” said Steven Englander, head of
research and strategy for Rafiki Capital Management. The Fed had
previously penciled in three rate-increases for 2018.
Expectations that the Fed will tighten policy more aggressively have
helped drive up U.S. Treasury yields. The yield on the 2-year U.S.
government note rose to its highest level since 2008 on Tuesday, while
the 10-year yield is nearing 3% for the first time in four years....MORE