All Eyes on US Congress as Fed Chair Powell Prepares for First Comments Since Ukraine War Began
cryptonews.comUS Federal Reserve chairman Jerome Powell is scheduled to testify before Congress on Wednesday and Thursday this week, with market participants in both crypto and traditional markets now eagerly awaiting his first comments on the economy after the war in Ukraine broke out.
The testimony, which will be delivered before the House of Representatives’ Financial Services Committee, marks the first occasion in nearly five weeks that the public gets to hear the Fed speak about the economy.
Since his last appearance, when Powell spoke mainly about how the Fed was working to get inflation down in the US, the economic outlook for the world has grown significantly more complex. Among the factors complicating the picture are heavy sanctions placed on Russia, a collapse of the Russian rouble, and oil prices that have surged to over USD 110 per barrel.
“Inflation has persisted longer than we thought,” and we will use our tools to ensure higher inflation “does not become entrenched,” was among the things Powell said last time he spoke publicly about the Fed's policy.
In addition to the war in Ukraine, the COVID-19 measures have also been eased in both Europe and the US since Powell’s last appearance – a development that is expected to boost economic activity.
The big question the market has for Powell now is to what extent the fallout from the war will have an impact on the Fed’s planned tightening of monetary policy. The next scheduled interest rate adjustment in the US is set for March 16, and it is expected that the central bank will raise rates by 0.25%.
Speaking at an online seminar on Tuesday, Atlanta Fed President Raphael Bostic said that the Fed’s job now has become more difficult.
“Our hard job just got a whole lot harder. Energy is
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