Fed Chairman Jerome Powell's Testimony: The Biggest Takeaways on Rates & More

Federal Reserve Chairman Jerome Powell appeared in front of Congress for the first of two days of testimony on Tuesday. These are the biggest market-moving points from Powell's comments.

Employment Remains Strong

The stock market was largely unaffected by Powell's comments, trading lower most of Tuesday. But when Powell said the Fed has seen "incoming data that suggests strengthening in the economy," Wall Street took it to mean a possible uptick in interest rate hikes. A large part of that economic strengthening came from hearty employment statistics Powell was quick to highlight in his opening remarks.

Inflation Not a Concern

Another big issue was inflation, where Powell struck a similar tone to predecessor Janet Yellen. He said inflation weakness in 2017 was due to "transitory" factors and that concerns about pricing aren't likely to affect the Fed's plans for rates in any meaningful way this year. Powell said he sees inflation gradually increasing to the Fed's 2% target.

Gradual Rate Hikes

Powell was vague in his forecasts for rate hikes, not offering a specific number of anticipated moves for the year. He stuck to predicting gradual monetary policy tightening over time. The Fed has previously suggested there will be three rate hikes in 2018 and two in 2019.