Powell sits down with the Senate

"We will stay the course until the job is done"

Federal Reserve Chairman Jerome Powell sat down with the Banking, Housing, and Urban Affairs Senate subcommittee. All the usual mainstream financial websites picked up on his prepared remarks which shocked the markets lower this morning.

Powell stated nothing new. He continues to stress the need to “bring inflation down to our 2 percent goal and to keep longer-term inflation expectations well anchored”. Ultimately it was this paragraph below that gained the attention of the mainstream press.

“Although inflation has been moderating in recent months, the process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy. As I mentioned, the latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time.”

None of this should be new to anyone that has been following Chair Powell since his reappointment at the end of 2021 and his many speeches since then. He has continually used these phrases to address the inflation problem that the Fed is facing. Is the market finally beginning to believe that he is serious?

Here is a look at the data that we’ll see coming out this week:

Wednesday March 8th

• ADP Employment Report

• JOLTS Job Reports

• Another round of congressional testimony from Chair Powell

• Balance of Trade (Imports/Exports)

Thursday March 9th

• Initial & Continuing Jobless Claims

• Challenger Job Report

Friday March 10th

• Unemployment Report

• Non-Farm Payrolls

• Participation Rate

• Average Hourly Earnings