Wall Street gains but trades erratical as investors consider Powell's remarks.
Business
S&P up 1.29%, Dow up 0.78%, Nasdaq up 1.90%; Microsoft increase
(Reuters) أ Although trade was turbulent as investors processed remarks from Federal Reserve Chair Jerome Powell on how long the central bank may need to manage inflation, U.S. equities soared to a substantially higher finish on Tuesday.
According to Powell, 2023 should see "substantial decreases in inflation."
After a positive U.S. employment report last Friday, investor expectations for less hawkish monetary policy began to wane. His words revived those optimism. In reference to the January nonfarm payrolls data, Powell remarked at the Economic Club of Washington, "We didn't expect it to be this robust," but it "shows why we think this will be a process that takes quite a bit of time."
According to Shawn Cruz, chief trading strategist at TD Ameritrade, "Powell anticipates they're not going to be dropping rates anytime soon, but that there is a decent path, that they're completing what they need to accomplish."
Powell's statements caused significant volatility in the major indices on Wall Street, and many predict it won't go away anytime soon.
It will be difficult to move the markets up decisively until we see inflation and softening across the board, according to Carol Schleif, chief investment officer at BMO Family Office.
