Further hikes from Switzerland, England and Turkey [Video]

Federal Reserve (Fed) Chair Powell didn’t say anything we didn’t know, or we wouldn’t expect in the first day of his semiannual testimony before the American lawmakers yesterday. He said that the Fed will continue hiking rates, but because they are getting closer to the destination, it’s normal to slow down the pace. He repeated that two more hikes are a good guess, and that the economy will suffer a period of tight credit conditions, below-average growth, and higher unemployment to return to lower inflation.

The US 2-year yield pushed higher. The 10-year yield was flat given that higher short term yields point at higher recession odds for the long term. The gap between the 2 and the 10-year yield is again at 100bp.

In equities, the S&P500 gave back some field, but not all sectors suffered. Tech stocks pulled the index lower, financials and real estate were down, but energy stocks led gains as US crude jumped past $72pb on news that the US inventories dipped by around 1.2 mio barrel last week.

Eleswhere, the Bank of England (BoE) meets after another shocker inflation report, and is broadly expected to hike the rates by another 25bp points, while the Central Bank of Turkey (CBT) is expected to hike the rates from 8.5% to 20%.