Good Morning on this best day of the week, Wednesday,

Second (and final day) of Fed Chairman Powell’s congressional testimony and markets are handling it in stride.

Most benchmarks and indices flattish on the day despite both ADP payroll numbers and the Jolts report coming in stronger than expected. Today’s commentary feels more muted than it did yesterday, which is why we are not seeing much more selling for the moment. The 10-yr note is sitting at 3.95% and mortgage bonds are flat.

In the end, Mr. Powell left markets with the expectation that the Federal Reserve will likely raise interest rates more than expected to combat high inflation. Referring back to the big bounce in economic activity to start the year including the strong hiring (still questioning the accuracy) has for the time, removed expectations that the Fed was close to pausing its rate increases.

The WSJ, Mr. Powell told lawmakers the process of bringing inflation down to the central bank’s 2% target would be “bumpy” and could require a faster pace of rate increases. After three months of easing, the year-over-year inflation rate excluding food and energy categories rose to 4.7% in January from 4.6% in December as measured by the Commerce Department’s personal consumption expenditures price index.

For good or for bad, these today comments are Mr. Powell his last public remarks before the Fed meeting on March 21-22.

We’ll get two major indicators between now and the meeting, which could influence the Fed’s thinking. First, the Labor Department will release February employment numbers on Friday. Employers added 517,000 jobs in January, well above expectations, so February’s data could tell us whether that surge was an aberration or the start of a new hiring boom.

Then, on March 14, the Labor Department will put out its inflation data for February. If it shows continued strength in consumer price increases, it could prompt officials to move more aggressively.

Tomorrow brings unemployment numbers and Friday, the jobs report. That will be the market mover. Tough to see a good reason to float going into that report.

Please remain safe and stay healthy, make today great!