Fed: Powell emphasises continuity but with hawkish tilt - ANZ

Fed Chairman Powell provided an upbeat assessment of the economy and positive outlook for inflation in his first Semi-Annual Monetary Policy Report to Congress and he said his assessment of growth has improved since the December FOMC meeting, notes Brian Martin, Research Analyst at ANZ.

Key Quotes

“We expect the Fed to raise rates by 25bps when it meets in March (20-21st) and we have pencilled in two further 25bps hikes this year. However, as the economy extends beyond conventional measures of full employment, the risk to rates lies to the topside.”

“Fed Chairman Powell said that he finds monetary policy rules helpful, but noted a lot of care is needed in using them. There was no evidence of an impending shift in the monetary policy-setting framework.”

“US bond yields rose and the dollar strengthened as the Q+A session progressed.”