Powell speaks in Congress – markets are mixed on expectations

U.S. Federal Reserve Chairman Jerome Powell testifies before a Senate Banking, Housing, and Urban Affairs Committee on Capitol Hill on March 3, 2022.

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Fed Chairman Powell will speak later today. Markets don’t know what to expect.

  • US Federal Reserve Chairman Jerome Powell will testify before Congress as a week of economic data lies ahead. So will the February jobs report, which will show whether the Fed’s aggressive rate hikes are beginning to cool the economy — especially after January’s hot report.
  • US equities showed a mixed picture as investors braced for more hawkish commentary from Powell – the Dow Jones Industrial Average rose slightly 0.12% while the Nasdaq Composite fell 0.11%. Asia-Pacific markets saw mixed trading on Tuesday after Australia’s central bank raised its spot rate by 25 basis points to 3.6%, the highest rate since June 2012.
  • China’s new foreign minister warned at a briefing on Tuesday of rising tensions with the US. path,” he said.
  • Iran says 8.5 million tons of lithium have been discovered in one of its western provinces. Known as “the white gold” for the electric car industry, the metal has seen prices skyrocket over the past year due to higher demand, before electric vehicle sales fell and business slowed.
  • PRO According to a screening conducted by CNBC Pro, these three stocks are the only ones in the MSCI World Index to have a positive annual return over the past ten years.

Good morning. This is Jihye Lee writing you from Singapore. I’m filling in for Yeo Boon Ping today, who’s on leave.

All eyes will be on Powell testifying today and Wednesday. What he says will guide traders and lawmakers alike as to how the Federal Reserve looks at the state of inflation and how far its campaign of aggressive hikes has come — and most importantly, where the markets go from here.

Government bond yields rose slightly after peaking above 4% last week.

Powell will almost certainly face tough questions from Congress. He will likely be asked how very high interest rates have hurt the economy as global markets face a slowing business environment.

Iran claims it has discovered the world’s second largest known lithium deposit, after Chile’s. Iran says it has found a deposit of 8.5 million tons of the metal. But whether the EV industry will benefit from that claim is highly questionable. While such a down payment could drive down lithium prices, bringing that commodity to market would depend on Iran’s ability to export. The country’s economy has been crushed by heavy sanctions and a declining currency.

And finally, we look ahead to International Women’s Day. Moody’s Analytics said in a recent report that it could take 132 years for the world to close the gender pay gap. And when that happens, the world will see a $7 trillion economic boost – that’s an additional 7% of global GDP in untapped potential.

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