Powell sets the tone

Federal Reserve Chairman Jerome Powell delivered his first speech on the economy as chairman this morning. Taking the reins from Janet Yellen, he seems to be marching to an even more optimistic beat than the previous chair.

Mr. Powell not only confidently indicated that the growth outlook of the United States remains strong, but also assured listeners that volatility shouldn’t be an issue of the economy. He even hawkishly stated that “some of the headwinds the U.S. economy faced in previous years have turned into tailwinds.”

U.S. inflation will continue to be in primary focus, as the Federal Reserve has clearly been cautious lest tailwinds lead the fledgling post-Great Recession economy a little too close to the sun.

U.S. data mixed

Even though Powell’s optimism heartens investors in the U.S. economy, they will certainly continue to be focused on data as it’s released.

Two pieces of data released this morning tell two different stories: The S&P Case-Shiller Home Price Index and the Durable Goods Orders for January. The former logged a 6.3% yearly increase from December 2016-December 2017, indicating a healthy appreciation in residential real estate values for homeowners in the United States.

The latter, Durable Goods, which measures the cost of manufacturer orders for goods such as vehicles and appliances, fell 3.7% in January from December. This sizable drop-off could indicate some worry creeping in for consumers.

Is Super Mario running out of time?

Jens Weidmann, President of the Bundesbank (the Central Bank of Germany), is rumored to be looking to replace Mario Draghi as the President of the European Central Bank. The German economist has been a proponent of faster policy normalization, as when he dissented from the ECB’s decision to extend quantitative easing in October 2017.

Draghi is scheduled to end his term in October 2019. If Jens were to take the helm he would be the first German to hold the post of European Central Bank President.