Fed's Powell Sees Gradual Rate Hikes as Economy Strengthens

Powell's testimony highlights a strong economic outlook with plans for gradual Fed rate increases. He emphasizes the robust job market, solid economic growth, and positive business sentiment. Financial conditions have tightened but remain supportive, with fiscal policy now acting as a tailwind. Powell aims to balance avoiding economic overheating with achieving 2% inflation. While inflation and wages are expected to rise, Powell does not address budget deficits, stock market, or interest rates, leaving these topics for committee discussion.

What does Powell attribute to the continued support of growth in household incomes and consumer spending?

• A robust job market

• A decrease in interest rates

• Increased government spending

• Higher taxes

How does Powell describe the recent changes in financial conditions?

• They have become restrictive

• They have loosened significantly

• They have tightened but are still accommodative

• They have remained unchanged

What does Powell suggest about the future of inflation?

• It will decrease significantly

• It will stabilize around the Fed's target

• It will remain unpredictable

• It will exceed 5%

Which topic did Powell avoid discussing in his testimony?

• The stock market

• The job market

• Consumer spending

• US exports

What is Powell's stance on the risks to the economic outlook?

• They are unpredictable

• They are mostly negative

• They are generally balanced

• They are heavily skewed towards growth