Powell has 'more hawkish tone' -portfolio manager

"He (Fed Chair Jeorme Powell) has adopted a more hawkish tone and it is clear that the Fed it wants to tamp tamper down inflation," said Watts.

Federal Reserve Chair Jerome Powell, in a congressional hearing that pointed to his likely confirmation for a second term as head of the U.S. central bank, said on Tuesday the economy should weather the current COVID-19 surge with only "short-lived" impacts and was ready for the start of tighter monetary policy.

The Fed chief said the central bank was determined to ensure that high inflation did not become "entrenched," and that far from diminishing job growth, a turn to higher policy interest rates and a runoff of its asset holdings was necessary to keep the current economic expansion underway.

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