What to make of US Fed chairman Jerome Powell's hawkish testimony

Jerome H Powell, the newly minted Chairman of the US Federal Reserve (US Fed) came out as a clear hawk in his first testimony before the Congress on Tuesday.
Powell said that his expectations for domestic economic growth have increased since the beginning of the year, citing the passage of the $1.5 trillion tax cut, lifting of the debt ceiling and stronger global growth.
Our take on his testimony:
1. Clearly hawkish
His talons became visible when he answered a Democrat’s question as to what would cause the US Fed to hike more than three times that the central bank’s guidance currently calls for?
Powell said that each of the Federal Open Market Committee (FOMC) member would take the developments since the December meeting into account and write down ‘new rate paths as we go into the March meeting, and I wouldn’t want to prejudge that.’
2. Personal views take front seat
When the Fed Chair testifies, he speaks for the Federal Reserve, not for himself. But, Powell gave his personal views many times. This is a big break from the past like Janet Yellen, Ben Bernanke or Alan Greenspan.

Strong show by Caterpillar, McDonald's has S&P at record high, Nasdaq drags

A set of strong earnings from companies, including Caterpillar and McDonald's, lifted the Dow and drove the S&P 500 to a record high, but the tech-heavy Nasdaq was dragged lower by losses in Google parent Alphabet Inc.

Shares of McDonald's surged 5 percent after the fast-food giant posted the biggest rise in sales at established restaurants globally in five years.

Caterpillar's shares rose 4.1 percent after the company reported quarterly results that smashed expectations and raised its full-year outlook for the second time this year.

However, Alphabet fell 2.6 percent, after the tech giant warned that expenses would remain high as more searches shift to mobile devices.

The S&P tech index has been the best performing sector this year and earnings from big tech companies will be closely watched to see if the rally has legs.

Amazon and Facebook, part of the high-flying "FANG" stocks, report results later this week, while Apple is due to report next week.

Earnings are expected to have climbed 8.8 percent in the second quarter, compared with an 8 percent rise estimated at the start of the month, according to Thomson Reuters I/B/E/S.
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