Powell in front of the House today

In listening to Jerome Powell today in his semi-annual testimony to the House of Representatives, a few things stood out.

1. With services inflation accelerating in January, many wondered if Powell would strike a more hawkish tone and walk back expectations for rate cuts this year. He did not. His message of expecting rate cuts this year was unchanged from the last FOMC meeting and his 60-Minutes interview. Interest rates fell from this lack of hawkishness.

2. When asked about commercial real estate, he repeated what he and Janet Yellen have said before; that the risk is ‘manageable.’ It is interesting that they keep using that specific word. It reminds me of “subprime is contained” from 2007.

3. When asked if the Fed had achieved a ‘soft-landing’, he wouldn’t agree to that that but rather said that economy has been solid “so-far” and they want it to continue.

Powell will be in front of the Senate tomorrow. Usually, there isn’t much new news in the second day of testimony.