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Fed's Powell to tamp down taper talk on Hill, stick with transitory inflation

EconomyJul 14, 2021 09:37AM ET
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© Reuters. FILE PHOTO: The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid/File Photo

(Reuters) - The U.S. job market "is still a ways off" from the progress the Federal Reserve wants to see before reducing its support for the economy, while current high inflation will ease "in coming months," Fed Chair Jerome Powell said in remarks prepared for delivery at a congressional hearing on Wednesday.

Story:

STOCKS: S&P 500 futures extended gains and were last up 0.4%, pointing to a firmer open on Wall Street

BONDS: The 10-year U.S. Treasury note yield slipped to 1.3771; 2s fell to 0.2349%

FOREX: The U.S. dollar index was down 0.4%

COMMENTS:

BEN JEFFERY, U.S. RATES STRATEGIST, BMO CAPITAL MARKETS, NEW YORK (via email)

   "Powell’s testimony was on the dovish side and the Treasury curve has steepened slightly in response, although we will look for clarity at this Q+A on Capitol Hill this afternoon."

ROBERTO PERLI, HEAD OF GLOBAL POLICY RESEARCH, CORNERSTONE MACRO, WASHINGTON (via email)

“The testimony conveys a stay-the-course attitude.  This is not very surprising because testimonies are rarely the preferred venues to convey policy shifts and because the FOMC hasn’t had a chance to discuss recent events, including yesterday’s CPI print.  The press conference following the July meeting should be much more informative about the future course of Fed policy. “

Fed's Powell to tamp down taper talk on Hill, stick with transitory inflation
 

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Comments (4)
James Andrews
James Andrews Jul 14, 2021 7:42PM ET
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"Transitory Inflation" is another communist wordplay. Prices never come back down, all inflation is permanent.
AIM Investor Journal
AIM_IJ Jul 14, 2021 7:22PM ET
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Talk about the 10 year bond yield going above 2 didn't last long. If inflation takes off and unemployment, wage growth remains at current levels, the yield will fall further and the USD begin to lose value. The risk of this happening is increasing, with talk of tapering being far out into the next year.
Haroon Ellahi Shaikh
Haroon Ellahi Shaikh Jul 14, 2021 3:32PM ET
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If Conficius has abandoned his mandate for protecting the American people from hyper inflation which is a form of taxation, cant there be a RED WAVE in mid terms?
Reverse Flash
Reverse Flash Jul 14, 2021 12:08PM ET
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