NEW YORK (AP) — The Latest on Federal Reserve Chairman Jerome Powell's presentation of the Fed's semi-annual monetary report to Congress. (all times local)
Stocks rose and bond yields fell after Federal Reserve Chairman Jerome Powell indicated that the central is ready to cut interest rates for the first time in a decade to help shore up the economy.
The S&P 500 index and the Dow Jones Industrial Average each rose about 0.6% in the first half-hour of trading Wednesday. The gains came after Powell's semi-annual monetary report to Congress was released.
Bond prices rose sharply as traders anticipated that the Fed would take on a looser policy on interest rates. Bond yields fell, sending the yield on the 10-year Treasury note down to 2.05% from 2.10% just before Powell's remarks were released.
The dollar also fell against other currencies in anticipation that U.S. interest rates would fall.
Federal Reserve Chairman Jerome Powell says "many" Fed officials believe a weakening global economy and rising trade tensions have bolstered the case for looser interest-rate policies.
Delivering the Fed's semi-annual monetary report to Congress, Powell sends the strongest signal yet that the central bank is ready to cut interest rates for the first time in a decade, possibly as soon as the July meeting.
Powell says that since Fed officials met last month, "uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook." Meanwhile, inflation has fallen further below the Fed's annual target of 2%.
Many investors have put the odds of a rate cut this month at 100%.
Powell, who has been under increasing attack by President Donald Trump, makes no mention of the president's criticism in his prepared testimony but does thank Congress for the "independence" it has given the central bank to operate.
Every sentence Federal Reserve Chairman Jerome Powell speaks to Congress this week is sure to be parsed by investors who expect — and hope — the Fed will cut interest rates later this month for the first time in a decade.
Powell will testify for two days starting Wednesday at a time when the economic landscape is a mixed one: The U.S. job market appears resilient. Consumer spending and home sales look solid. But the economy is likely slowing. President Donald Trump's trade wars have magnified uncertainties. And inflation remains chronically below the Fed's target level.
Powell and the Fed have recently made clear they will do whatever they deem "appropriate" to sustain the economic expansion — a message that traders have interpreted to mean a coming rate cut.