Federal Reserve Chair Jerome Powell is delivering his twice-yearly testimony before Congress, addressing the state of the U.S. economy, inflation, and monetary policy outlook.

With markets closely watching for signals on interest rate cuts, Powell's remarks provide valuable insights into the Fed's future actions—especially as policymakers assess inflation risks, labor market conditions, and economic stability.

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1. Powell's Key Statements on Interest Rates

💡 No Urgency for Rate Cuts:

• Powell reiterated that the Fed is in no rush to adjust interest rates.
• While inflation has moved closer to the 2% target, policymakers remain cautious about reducing policy restraint too soon or too aggressively.

💡 Balancing Risks:

• Cutting rates too quickly could reignite inflation, while keeping rates too high for too long might slow economic growth and impact employment.
• The Federal Open Market Committee (FOMC) will rely on incoming economic data to determine its next moves.

💡 Labor Market & Economic Growth:

• The U.S. economy remains strong, and the labor market has cooled from overheated levels, reducing concerns about wage-driven inflation.
• Powell emphasized that the Fed's goal remains maximum employment and stable prices.

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2. Market Reactions & Investor Sentiment

📈 Stock Markets Show Resilience:

• Equities remain stable, as Powell's testimony largely aligned with market expectations.
• The S&P 500 and Nasdaq futures saw little movement, as investors awaited further economic data.

📉 Treasury Yields Firm Up:

• U.S. Treasury yields edged higher, reflecting a wait-and-see approach from bond investors.

💰 Rate Cut Expectations Shift:

• Markets now expect the first rate cut to come later in 2024, rather than in the first half of the year.
• The upcoming U.S. Consumer Price Index (CPI) report will be a key indicator of whether inflation remains on track for the Fed's target.

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3. Powell's Take on Key Economic Issues

📌 Donald Trump's Tariffs & Inflation:

• Powell is expected to discuss the potential inflationary impact of Trump's recent tariff hikes on steel, aluminum, and global trade.

📌 Bank Capital Requirements:

• The Fed Chair may address possible adjustments to capital rules for U.S. banks, impacting financial sector regulations.

📌 Global Economic Risks:

• Powell will likely be questioned on geopolitical risks, supply chain disruptions, and the Fed's strategy for maintaining financial stability.

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4. What Investors Should Watch Next

🔹 Upcoming Economic Data

• The February CPI report will be a key factor influencing the Fed's next moves.
• Stronger-than-expected inflation could delay rate cuts, while a continued cooling in prices may accelerate easing.

🔹 FOMC Meeting & Rate Decisions

• The next Fed meeting in March will provide clearer signals on the timeline for rate cuts.
• Market sentiment may shift depending on Fed Chair Powell's post-meeting statements.

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5. How to Track Market Movements & Interest Rate Trends

Investors can use Financial Modeling Prep's (FMP) APIs to monitor:

🔹 Full Financials API - Track macroeconomic trends and how Fed policies impact companies' financial health.
🔹 Price Target API - Follow analyst projections on rate-sensitive stocks.
🔹 Earnings Calendar API - Keep up with corporate earnings to gauge economic health.

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Final Thoughts

Jerome Powell's testimony reinforces the Fed's cautious approach to interest rate cuts, keeping markets focused on inflation data and economic growth indicators.

🔹 Will the Fed cut rates in mid-2024, or will strong economic data delay easing? Investors should stay tuned for the CPI report and the next FOMC meeting.

📊 Stay ahead of market trends—explore FMP's financial data APIs today!