Fed Chair Powell Testifies

#1 Powell’s Take on Recent Market Developments – The Dow is down 6% since its peak in January as 10 year Treasury yields close in on 3%. Most U.S. policymakers are not concerned about these moves, especially given the recent recovery. If Powell shares these views and downplays the February correction, we should see stocks and risk currencies rally.
#2 Outlook on Growth and Inflation – Powell’s emphasis on wage gains, growth and inflation will also be very important. Wage gains have been on the rise and if he says it could push inflation higher, necessitating faster more aggressive moves on rates, it would be disastrous for stocks and risk appetite. In this case, the dollar would rise against most of the major currencies.
#3 Position on More Rate Hikes – Last but certainly not least is how much transparency Powell provides on rate hikes. It is widely believed that he will emphasize the need for gradual tightening but if he gets specific and confirms that 3 to 4 hikes may be necessary this year, it would be the most disruptive to currencies as the dollar would propel higher. However if his comments are relatively benign in that he refrains from talking about the specific number of hikes, investors could see this as a green light for further gains in equities and risk currencies.
Source from my broker email