Powell has been nominated for four more years at the Fed.
The pool and the images are part of the pool.
The markets reacted strongly to the news that President Joe Biden had nominated Jerome Powell to serve a second term as Federal Reserve chair.
Powell was up against Brainard for the job. She will become the vice chair of the US central bank.
As the news came through, investors bet that Powell would be morehawkish than Brainard would have been. The Fed under his watch will be more willing to cut back on bond purchases and raise interest rates to stamp out inflation, which is at a 31 year high.
Bond yields have risen in anticipation of less support from the Fed.
The yield on the 2-year US Treasury note has risen to its highest level in over a year.
The yield on the 10-year Treasury note, which is a benchmark for other borrowing rates throughout the economy, has risen sharply from 1.55% on Friday to 1.655% on Tuesday. The higher bond yields are weighing on the stock market.
According to the interest rate probability tool, investors think the Fed will hike interest rates three times in the next year, up from the expectation of two hikes two weeks ago.
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Peter van Dooijeweert, a managing director at the investment company Man Group, told Insider that the market is reading it in a certain way. They expect him to be more cautious and that the rate rises will come earlier.
Markets might think that Powell will be more aggressive on price rises now that he doesn't have to win a nomination.
He wondered if that would make him more dovish because he's free for four years to do what he wants.
Many analysts were confused by the market's reaction, given that Powell has overseen the loosest monetary policy in Fed history.
Neil Wilson, chief market analyst at Markets.com, said that the reaction to the news seemed odd. He said that the appointment means continuity because Powell has not been a hawk.
The Powell nomination seems to have been taken as a signal by the market. The Fed and the White House are starting to recognize the danger of inflation as it gets higher.
Tech stocks, which tend to do better when interest rates are low, suffered on Monday. The index may be in for another rough day on Tuesday.
Business Insider has an original article.
