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Fed Chair Powell and Treasury Secretary Yellen to testify on inflation and Omicron variant risks

The Yahoo Finance Live panel previews what to expect ahead of the testimony Fed Chair Powell and Treasury Secretary Yellen will give to the Senate Banking Committee.

Video Transcript

BRIAN SOZZI: We are just moments away from what could be market moving commentary from Federal Reserve Chairman Jerome Powell. Powell is testifying in front of lawmakers on the coronavirus and CARES Act, just as markets are under pressure again due to omicron variant fears. We're seeing some mixed action here, the Dow down close to 300 points, S&P 500 in the red. The NASDAQ interestingly catching somewhat of a little bit of a bid here.

But Brian, I'm going to resist my inclination to talk about Shiba Inu. It is absolutely ripping higher, our top asset trending class on our ecosystem on the [INAUDIBLE] platform. And I'm going to start with Powell. Powell's commentary yesterday in those prepared remarks on what he's about to talk about, I think doing its part to spook investors, of course, alongside those comments from Moderna's CEO.

BRIAN CHEUNG: Well, and to be fair, I don't think this is necessarily a, oh, Federal Reserve is spooking markets. I think people are just spooked in general. I think as human beings, aside from the markets themselves, a lot of us are concerned about what this omicron variant means for us and whether or not we should be getting our-- or whether or not we should have to wait for a new round of vaccines, for example. These are all scientific questions that the Federal Reserve chairman can't answer.

But what he can answer, at least for right now, is whether or not the Fed will try to keep the spigot completely open on its easy money policies. And at least in the written statement that the Fed chairman has submitted to the Senate Banking Committee in advance of this hearing, he said greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply chain disruptions on both sides of the Federal Reserve's dual mandate of price stability and maximum employment.

That's not a good thing, which means, yes, that argument could be there for the Fed to maybe stave off those efforts that we had heard at least before Thanksgiving last week of maybe wanting to speed up the process of pulling back on its asset purchase program or the quantitative easing program. We'll see what side of that argument the Federal Reserve chairman lands on in a few minutes or so.

But of course, this is a Senate Banking Committee hearing. This is not his nomination hearing, by the way, so he could field a number of other questions like on cryptocurrency. So I mean, who knows? Maybe Shiba Inu or the Ethereum or Bitcoin gets some shout outs in the next few hours as well.

JULIE HYMAN: Or maybe stablecoin. I don't know. Maybe the-- what's the central bank dollar? Is that with the central bank--

BRIAN CHEUNG: Yeah, US digital dollar--

JULIE HYMAN: The Central Bank Digital Currency?

BRIAN CHEUNG: CBDC.

JULIE HYMAN: Yes.

BRIAN CHEUNG: Yep.

JULIE HYMAN: All of that stuff. You know, also, as I brought up earlier, I do think timing is important of when all of these concerns are being raised. In other words, is it just omicron, or is it also sort of the underlying market dynamics here, the fact that we're close to the end of what has been a positive year for stocks? So are you also getting some early sort of tax selling related to that that is being, yes, perhaps triggered by omicron?

But it's always tough when you're seeing these kinds of sell-offs, right, to know if it's just A leading to B. And I think that, you know, we should be cautious a little bit to some extent to talk about how much people are really concerned about omicron, and there are maybe some other things going on. Not that they're not concerned, but that it's a more complex picture than perhaps just that.

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