US Stock Market Higher in Anticipation of Fed Chair Testimony

U.S. stocks rose sharply on Monday, led by gains across sectors as investors bet that Federal Reserve Chairman Jerome Powell will stick to a gradual rate-hike approach despite indications that inflation is perking up.

Powell faces questions from both houses of the U.S. Congress in a semi-annual testimony starting on Tuesday, his first major set piece since he took over from Janet Yellen earlier this month.

His testimony comes at a time when investors have been anxious about the pace of rate hikes, which have weighed on equity markets globally.

“I don’t think he’s going to say anything dovish or hawkish – in an attempt to at least have the first appearance to be down the middle or balanced,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

“I surely think the current Fed would let some inflationary pressure run hotter than their target for a period without getting more aggressive.”

The Fed said on Friday it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.

via Reuters

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