Powell pick seen positive for risk despite knee-jerk selloff
BNN Bloomberg
Jerome Powell getting a second term as chair of the Federal Reserve is positive for risk assets, despite the knee-jerk selloff to his renomination, according to strategists.
Jerome Powell getting a second term as chair of the Federal Reserve is positive for risk assets, despite the knee-jerk selloff to his renomination, according to strategists.
One of their key takeaways is that stocks should benefit from reduced uncertainty and the market should calm in coming days. Another is the dollar should get some support from the possibility of faster-than-expected Fed tapering.
Powell said the Fed would use its tools both to support the economy and labor market and prevent higher inflation from becoming entrenched.
Stocks and Treasuries fell and the dollar hit the strongest since September 2020 on bets that the Fed might tighten policy more quickly. Some strategists argued those wagers may be too aggressive as the Fed is expected to be cautious about raising interest rates.
Here’s a selection of comments on the outlook for markets:
