Stocks closer higher after updates from Fed, Powell

The Dow closed higher by more than 300 points in a broadly positive day for the market. The S&P 500 and Nasdaq Composite each rose roughly 1%.

The 10-year Treasury yield drifted lower after making some volatile moves during Powell’s press conference. The benchmark yield was trading near 1.307%, down 1.7 basis points for the day, at 4 p.m. ET. The 30-year yield saw an even larger decline, but short-term rates were higher.

-Jesse Pound

Medium and long-term path for Fed policy unclear, strategist says

Lawrence Gillum, fixed income strategist for LPL Financial, said that the medium and long-term policy path for the Fed remains unclear even as the central bank appears to be getting closer to tapering and rate hikes.

“We continue to think the Fed will announce plans to taper in November with the actual reduction in bond purchases taking place in December,” Gillum said in a note. “Of note though, through the Dot Plot, signaling on future path of short-term interest rates continues to show the wide divergence of opinions on the committee. As such, the future make-up of the committee and whether Powell is reappointed or not will likely have a notable impact on the future of monetary policy.”

-Jesse Pound

Powell getting ‘a little more hawkish,’ Jefferies’ Zervos says

David Zervos, chief market strategist at Jefferies, said on “Closing Bell” that Wednesday’s press conference showed a more hawkish side of Jerome Powell than the Fed Chair has shown in the past.

“I sense just something a little more hawkish in Jay than usual, especially coming after his Jackson Hole speech which was extremely dovish,” Zervos said.

-Jesse Pound

U.S. isn’t falling behind on digital currency innovation, Powell says

Chair Powell said the Fed is “working proactively” evaluating whether to issue a central bank digital currency. “We haven’t made a decision about the CBDC but we will be issuing a discussion paper soon, in order form the basis” of public engagement on the issue.

“The ultimate test we’ll apply when assessing a central bank digital currency and other digital innovations is where their clear and tangible benefits outweigh costs and risks,” he continued.

He also said he doesn’t think the U.S. is behind in the global race to issue a central bank digital currency.

— Tanaya Macheel