S&P 500, Nasdaq Talking Points:
- Perhaps lost in the shuffle of Powell’s nomination atop the Fed yesterday was a comment from the head of the US Treasury Department, Janet Yellen, in which she had some fairly direct comments on the topic of inflation.
- Stocks set a fresh all-time-high yesterday so, at this point, weakness in equities would be considered more of a pullback than the start of a reversal.
- The analysis contained in article relies on price action[1] and chart formations[2]. To learn more about price action or chart patterns, check out our DailyFX Education[3] section.
Yesterday saw FOMC[4] Chair Jerome Powell get nominated for a second term atop the Fed. As our own Christopher Vecchio outlined, the choice was down to Powell and Lael Brainard[5], who ended up being nominated for Vice Chair. Ahead of the decision, it was difficult to discern how much difference might come from either candidate. But, in the aftermath, there’s been a market response along with an interesting twist from another noteworthy character.
But before we get to that, the immediate market response to Powell’s nomination, which dropped right around 9 AM ET, was a quick rush of USD[6] strength as Treasury Yields drove higher. And while stocks received an initial boost after the 9:30 open, that bid quickly dissipated and sellers took control for the remainder of the day and that’s held into this morning.
The takeaway appears to be that there’s even more confidence that inflation[7] is, in fact, transitory to a degree. But, perhaps not as ‘transitory’ as the Fed had initially hoped and this can be gleamed from the market response of higher yields and
