After a volatile afternoon, stock futures opened marginally higher Monday evening, as investors considered the market effects of Federal Reserve Chairman Jerome Powell's re-nomination.
Contracts for the S&P 500 index increased. Earlier in the day, the blue-chip index hit an all-time intraday high before reversing and ending in the red, dragged down by a dip in technology firms. With a decline of more than 1%, the Nasdaq underperformed, while the Dow finished in the green. Even after the business reported better-than-anticipated quarterly revenue growth and full-year expectations, shares of Zoom Video Communication dipped in late trading, implying that usage of the video conferencing company's software held up better than expected during the day. On Tuesday, companies such as Best Buy, Dick's Sporting Goods, and Nordstrom are expected to release their quarterly results.
The re-appointment of Federal Reserve Chair Jerome Powell to the top leadership post at the central bank drew market attention this week, with many investors cheering the prospect that the Fed's previously signaled monetary policy framework will be maintained. This includes forecasts for current asset-purchase tapering to continue through the middle of next year, as well as at least one interest rate hike before the end of 2022.
"Continuity is undoubtedly excellent news at a time when there is so much uncertainty." "We have tremendous uncertainty because we're shifting from the period of the cycle where the Fed was shoring up the recovery from the pandemic-induced recession, and... it managed to prevent a financial market catastrophe," Grant Thornton chief economist Diane Swonk told Yahoo Finance Live. "But today we're dealing with inflation and incredibly easy financial market circumstances." And having to pivot to deal with inflation and bring it down without jeopardizing the economy is a difficult task. Since the early 1980s, we haven't seen the Fed actively try to bring inflation down."
President Joe Biden also nominated Fed Governor Lael Brainard, who had been mentioned as a possible replacement for Powell as Fed Chair, as Vice Chair of the Fed's Board of Governors. Market investors have switched their attention to who might fill the three vacant and soon-to-be vacant seats on the Fed Board, including the critical Vice Chair for Supervision position, now that these two nominations are in place. In a press statement released Monday morning, Biden said he expects to announce the names "starting in early December."
"Political decisions like these are a struggle between affinity — you like someone in your own party — and convenience — what can you get the Senate to do for you, and how well would markets accept it?" "You have to look at the Powell-Brainard appointments as part of a larger package," said Vincent Reinhart, chief economist and macro strategist at Dreyfus-Mellon. "The White House will have to choose three new governors, all of whom are expected to be more progressive. So, in six months, the group of persons that Chair Powell will have to wrangle to make judgments will be more dovish than it is now."
If emerging market central banks were already struggling to strengthen their currencies as the Federal Reserve reduced monetary easing, their mission is now much more difficult.Banks and Finance
Meanwhile, according to the TASS news agency, the Ministry of Finance is on track to present a measure governing cryptocurrency by February 18.Banks and Finance