Fed Chairman Powell to speak at 1:10 p.m. GMT
Powell’s speech will be the main one to watch today, and is expected to last around 45 minutes as he discusses the review of the Fed’s monetary policy framework.
Among the key questions the market will anticipate in its speech will be the outlook for inflation and how the Fed will make future policy decisions based on that.
We must also keep in mind the Fed’s opinion on the economic outlook – whether or not it reaffirms the sentiment of last week’s minutes – and also the control of the yield curve; although I would say Powell is unlikely to tread too much on the latter.
If Powell maintained a more neutral stance it would likely keep the stock market going, but a more cautious tone could result in some profit taking activity.
As for the dollar, that will largely depend on the reaction of the bond market in my opinion. But month-end rebalancing flows will also play a role, which could make things a bit trickier.