Fed’s Powell prepares for congressional testimony in early March

Fed Chair Jerome Powell is set to give the Senate banking committee its biannual monetary policy update on March 7. The House Financial Services Committee is expected to host Powell at a hearing at least a day earlier, based on past practice.

Investors will be keenly interested in Powell’s congressional testimony, likely his last public steer before the Fed’s mid-March meeting, where policymakers will assess progress on their fight against inflation and potentially signal when they may start cutting interest rates. Lawmakers’ questioning will likely focus on the central bank’s handling of inflation, particularly in light of the surprise jump in the consumer price index in January.

The figures further reduce the chances that Fed officials will start lowering interest rates soon, and any additional re-acceleration might reignite talk that they will resume hikes. Some policymakers have said they want to see a broader easing of price pressures before cutting rates.

The hearing will also focus on a Fed plan to boost capital requirements on the largest US banks, which many Republicans have opposed.