- Stock traders expecting Powell to push back against the powerful rally that led to a loosening of financial conditions were disappointed, with the market finding reasons to move higher.
- According to Michael Feroli of JPMorgan, what the Federal Reserve Chairman said on Tuesday wasn't all that different from what he said last week. Powell basically stated that while disinflation has begun, it has a long way to go and that additional hikes are likely if the labour market remains strong. When asked if he would have raised rates by 50 basis points in February instead of the 25 basis points that officials did, Powell declined.
- The S&P 500 has halted a two-day slide caused primarily by overbought conditions. The tech-heavy Nasdaq 100 rose more than 2%, led by Microsoft and Alphabet. The dollar fell alongside two-year treasury yields, which are more sensitive to upcoming Fed moves.
- Earlier on Tuesday, Fed's Kashkari stated that January's strong labor-market report shows that the US central bank will need to continue raising interest rates. "Right now, I'm still at around 5.4%," he told CNBC on Tuesday, referring to his forecast for how high interest rates must go to keep inflation under control. Last week, the Fed raised its benchmark rate to a range of 4.5% to 4.75%.
