Powell faces balancing act as normalisation proceeds

Fed watchers expect new chair Jerome Powell to continue the monetary policy normalisation initiated under Janet Yellen, but volatile stock markets are testing his determination, as bond yields and inflation expectations rise.

The same day Powell was sworn in, February 5, the Dow Jones Industrial Average dropped by 4.6% and the S&P 500 Index by 4.1%. The turmoil had begun on February 2, when official data revealed that average hourly wages in the US rose by 2.9% year-on-year last month.

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