Fed Chair Powell reaffirms rate hike trajectory

US markets dipped lower today after newly appointed Federal Reserve Chair Jay Powell reaffirmed the US central bank's intended trajectory of gradual rate hikes this year. The US dollar also strengthened around 0.5% against notable peers following the statement and US Treasuries (government bonds) saw some selling as the securities become less attractive in a rising rates environment. Powell commented that, in his view, the US economic outlook has strengthened since December and that inflation could well advance towards the central bank's 2% target. This was supported by a separate release today showing US consumer confidence to be the highest since 2000, indicating a heating up of the economy. Considering that economic and inflationary prospects are rising, markets are perceiving increased chances of the Fed tightening monetary policy further than planned. This could spell four interest rate hikes this year as opposed to three.