(Bloomberg) — Wall Street traders breathed a sigh of relief, with Jerome Powell once again signaling that while a strong economy will keep officials on hold for now, he expects the Federal Reserve to cut rates this year.
Stocks and bonds rose as investors took his remarks as a “no news is good news” development. The Fed chief said he’s not looking for inflation to reach the central bank’s 2% target to start easing policy. New York Community Bancorp whipsawed after raising over $1 billion in equity to shore up investor confidence.
During this congressional testimony, Powell also noted that the risk from commercial real estate is “manageable.” The Fed Chair also said that the central bank is likely to significantly change its plan to require large lenders to hold more capital — a move that would mark a major win for Wall Street giants.
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