US stocks pushed higher after Fed Chair Powell’s testimony calmed financial market worries over runaway inflation triggering a quicker removal of stimulus. Powell outlined how the inflation overshoot is from categories directly affected by reopening. He noted there is extremely strong demand and that the supply has been caught flat-footed. Powell stated that the 5% inflation environment is unacceptable, but that would require more than one report to unnerve markets.
After being asked if he was concerned over Russia and China dumping dollars, Powell showed his confidence over the dollar. He noted that the dollar is the world’s reserve currency and that no currency is close to being able to compete.
The labor market still has lengthy recovery ahead and that should support the Fed’s accommodative stance easily for the rest of this year. Republicans tried to get Powell to support the removal of federal unemployment benefits, but Powell did not bite. Powell did acknowledge several factors are impacting labor supply right now but that should abate and wane over the coming months.
Infrastructure Crunch Time
Infrastructure spending is getting close to getting done. A group of 21 senators have a bipartisan infrastructure deal worth around $1 trillion on the table. Wednesday will be the key for infrastructure talks as Senate Majority Leader Charles Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) will meet with White House officials.
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Ed Moya
His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.
Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.
Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.
Ed holds a BA in Economics from Rutgers University.
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