FED POWELL TESTIFIES HAWISH? OR DOWSIH?

HAWKISH = GOLD DOWN / STOCK DOWN /CRYPTO DOWN/DOLLAR UP

DOVISH = GOLD UP / STOCK UP /CRYPTO UP/ DOLLAR DOWN

He will surely say the Fed is data dependent. Key things to watch:

About “The disinflationary process has begun” – he will probably say that is has begun but will take more time than expected. That would be hawkish.

Where are interest rates headed? If he says they will rise to a higher level than expected, it would be hawkish.

If he says there is still more data to wait for – NFP this Friday, CPI next week – he would be dovish.
We think he will not commit to higher rates than previously expected, but open the door to such an option.

To be really hawkish, = he would need to say that rates could rise to 6%. We don’t think he’ll go there.
All in all, if he says that
—The disinflationary process will take more time

Rates could rise to higher levels than previously expected – data dependent – it would be moderately hawkish and support the USD.

The other options are 6%, which is 100% hawkish,
OR
Saying that January’s strong data could be a one-off event, which would be 100% dovish.


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