Wall Street Today | Market Watches FedSpeak with Bated Breath

Investors closely watched Federal Reserve President Jerome Powell Tuesday as he spoke before the Senate Banking Committee, the first of a two-day stint before Senators and House Representatives. Fielding questions about mergers and monetary policy, Powell said there would likely be rate cuts this year and that service inflation would have to come down, but no recession was coming.

Federal Reserve Chair Jerome Powell reiterated Wednesday that he would like more confidence in inflation moving back sustainably toward the Fed's 2% target before unleashing the policy easing down the road. During a Q&A session with the House Financial Services Committee, Powell highlighted the significant progress made in controlling inflation.

"We've made quite good progress on that over just the past year," Powell said, noting the economy's achievement in nearing 50-year low unemployment rates. "We want to see a little bit more data so that we can become confident and begin to reduce policy rates."

Powell revealed that the number of rate cuts will depend on the economy's evolution, recalling that the latest Fed projections indicate a median preference for three rate cuts in 2024.

Powell dismissed fears of an imminent recession. With last year's growth exceeding 3% and forecasts indicating continued solid growth, Powell said: "There's no reason to think that the U.S. economy is in some kind of short-term risk of falling into recession."

Powell acknowledged there's always a chance that an economy will fall into recession, yet he firmly stated that "the possibility ... is not elevated at the current time."

Gold closed at a record high for a fourth-straight session on Wednesday as congressional testimony from Federal Reserve chair Jerome Powell did not shed light on when the central bank will begin lowering interest rates.

The price of the precious metal rose to new heights over the past three sessions on expectations that lower interest rates are on the way, cutting the carrying costs of owning gold. Momentum investors have also added buying pressure. However, the first of Powell's two days of congressional testimony offered little clarity on when lower rates will come.

The U.S. Securities and Exchange Commission voted 3-2 Wednesday to approve a watered-down version of a new rule requiring publicly traded companies to disclose their emissions of greenhouse gases, which scientists believe contribute to climate change.

The new rule requires firms to reveal any climate-related material risks in securities filings, such as how much greenhouse gases they directly produce. However, the measure omitted a controversial proposal to require businesses to calculate and disclose how much pollution comes from indirect sources like supply chains and a company’s customers.

Some businesses had opposed the supply-chain provision as onerous to comply with, although environmental groups supported the more expansive rule.

The SEC said in a statement that the final measure “reflects the commission’s efforts to respond to investors’ demand for more consistent, comparable and reliable information about the financial effects of climate-related risks on [a company] and how it manages those risks.”