I think one of Powell's final comments really captured the mood of his appearance:
"There's an overwhelming need to get inflation under control," he said, ranking it above growth and employment.
He laid out a path where the Fed will continue to raise rates until inflation comes under control or they have strong visibility to price stability.
Naturally, that kind of talk hit risk assets. The S&P 500 fell to 4045 from 4080 just before his speech. But the selling didn't last long and stocks are now at the highs of the day.
That's a nice change in the recent sell-the-rips mentality in markets. Some of that may be a reflection of retailers seeing upbeat sales or the market calibrating when Fed hikes will stop and thinking that sharper hikes now will ensure a return to the low-inflation era from before the pandemic.
The FX market has followed the same path with commodity currencies dipping initially then fully recovering.
