Powell: Fed Policy One Factor In Asset Price Rise

Highlights of opening questions for Fed Chair Powell in Senate Banking Committee Q&A:

• Powell notes on a question about labor force participation that the tools that can really address [dropouts from the labor force] are part of fiscal policy... "I today will stay away from fiscal policy and really talk about what we [the Fed] can do".
• Powell says the Fed hasn't decided whether to extend emergency temporary capital relief for large banks, which expires at the end of March, and will not commit to ending dividend restrictions.
• Gamestop makes its first appearance in the testimony w a question from Sen Toomey on recent asset price increases and the Fed's role ... Powell says markets are factoring reopening of economy, expectations of corporate profits, vaccination, many factors..."monetary policy I would agree is one of them".
• Toomey asks about increase of inflation w/o being back at full employment, what would imply for Fed asset purchases: Powell reiterates fwd guidance language on moderating purchases, says "that's what it'll take...substantial further progress". Says such progress has not been made in past 3 months but expects it to pick up.