Focus On Powell's Yield Commentary

Fed Chair Powell's semi-annual Monetary Policy Report testimony before the Senate Banking Committee begins at 1000ET/1500GMT (livestream here); text usually out 1.5 hours beforehand (so 0830ET, will be available at previous link and on Fed website).

• Attention appears to be mainly on his view on the recent rise in nominal and real yields and curve steepening. Most expect Powell to view this as a welcome development as it reflects economic optimism, but see him staying the course on his previous dovish commentary given slack in the labor market in particular.
• Deutsche sees Powell as likely to play up the Fed's "patiently accommodative" monetary policy outlook with the US "very far" from a strong labor market. Citi's core view is that Powell "will not push back against rising rates...but there is a chance that he may".
• NatWest does not expect "significant revelations", pointing to Powell's "consistently articulated" dovish views since the Jan FOMC. As for rising real yields, NWM cites NY Fed Pres Williams' last week that they are not a concern, w Powell likewise to interpret them as "a positive sign".
• ING sees Powell as having "has the opportunity to calm the global rates sell off....If the recent comments by other Fed officials are any guidance then he is unlikely to sound particularly concerned by higher yields."