Both US government bonds yields and the Dollar have risen today after relatively hawkish comments from Fed Chair Powell as he testified to the House Financial Services Committee. In his opening remarks, Powell reiterated the view that further gradual rates increases will be required but also noted that they will have to strike a balance between avoiding an overheated economy and bringing PCE inflation to 2%. He went on to say in the Q&A session that his own outlook for the economy has strengthened since December while recent data has increased his confidence that inflation will rise. His comments have also weighed on US equity markets, notably his admission that they do see high asset prices. US bourses are firmly in the red at the closing bell although financials have outperformed amid the prospect of higher rates (DJIA -1.2%, S&P -1.3%, NASDAQ -1.2%). Elsewhere, oil prices have held lower with US crude futures settling at $63.01 (-$0.90). Gold prices also continued their decline, lower by $14.47 at the closing bell. Elsewhere, No. 2 Republican Cornyn in US Senate says Congress may not have time to address infrastructure this year.
* Bloomberg: The U.S. is leaning toward imposing oil-sector sanctions on Venezuela before the country holds April 22 elections that opposition leaders have vowed to boycott, according to a senior State Department official.
* More from Fed’s Powell:
• Expect a meaningful increase to demand in the next couple of years due to recent fiscal changes
• Fed is taking a fresh look at the Volcker rule; Fed wants to ease the Volcker rule in a way that is faithful to the law
• The US is not on a sustainable fiscal path
• If the Fed gets behind and the economy overheats, they will have to raise rates faster
* Iraq PM Abadi said they have agreed with Kurdish authorities to restart exporting Kirkuk crude and resolve differences at a later date.
* US Crude futures settled at $63.01 (-$0.90) | Brent Crude futures settled at $66.63 (-$0.87)
* No. 2 Republican Cornyn in US Senate says Congress may not have time to address infrastructure this year