Fed Chair Jerome Powell’s hearing in the limelight today – Danske Bank

In view of analysts at Danske Bank, the most important event today is Fed Chair Jerome Powell’s hearing before the US House of representatives’ Financial Services Committee.

Key Quotes

“We will look for any signs whether the Fed will turn more hawkish under Powell, not least after Congress passed an expansionary spending bill. In our view, the Fed is unlikely to offset the fiscal stimulus one-to-one, which is one reason why we believe inflation will move gradually higher.”

“Focus in USD crosses today will be on Powell’s testimony to the House Committee where we will look for clues as to whether the new Fed Chair brings a more hawkish stance with him following the latest US reflationary pressure. While it is not our base case that Powell is a game changer for Fed policy, risks are for some EUR/USD downside this week.”