With vaccines rolling out and the government fiscal taps open "there is good reason to think we will make more progress soon" toward the Fed's goals of maximum employment and 2% sustained inflation, Powell told a Wall Street Journal forum.
Markets seemed impatient for more from the Fed chief to address the move up in bond yields, sending the 10-year Treasury interest rate back above 1.5% and knocking stocks on Wall Street.
STOCKS: The S&P 500 closed 1.33%; The tech-heavy Nasdaq was off 2.11%, briefly moving more than 10% down from its record closing high on Feb 12.
BONDS: The 10-year U.S. Treasury note yield rose to 1.5362%; 2s ticked lower to 0.1407%
FOREX: The U.S. dollar index rose to its highest since Feb 5 and was last up 0.57%
MINH TRANG, SENIOR FX TRADER, SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA
Some investors expected Powell to "at least acknowledge that there is some concern regarding the pop in yield, which he didn't do."
"Overall his message remains the same, which is essentially they will maintain looser monetary policy until the economy shows consistent strength and we get back closer to what we were pre-pandemic in regards to both inflation and the labor market"
DENNIS DICK, HEAD OF MARKETS STRUCTURE, PROPRIETARY TRADER, BRIGHT TRADING LLC, LAS VEGAS
"This market has already been weak and was looking for another excuse to sell."
"Now, Powell gives them that excuse as well."
KEVIN FLANAGAN, HEAD OF FIXED INCOME STRATEGY, WISDOMTREE, NEW YORK
"They're trying to somehow thread that needle between not showing too much concern and not tipping their hand toward any potential yield curve control or any changes in policy while also acknowledging 'yeah, we're watching this.'"
"The market is perhaps hoping that the Fed may make some adjustments in the composition of their quantitative ease and yield curve control. I think the market would like to see the Fed perhaps come out and say maybe they would begin buying more longer duration and buying less shorter duration rather than the mix they're doing at the present time. So there may be some disappointments there. You would think with the Fed meeting less than two weeks away that if in fact the Fed was going to make a policy change like that this would have been the perfect trial balloon to sort of message that to the markets."
KATHY BOSTJANCIC, CHIEF U.S. FINANCIAL ECONOMIST, OXFORD ECONOMICS, NEW YORK
"He definitely reaffirmed they're going to be very slow to raise rates. We're far, far away from objectives they have. I'm wondering perhaps that he downplayed the risk of inflation too much."
"Maybe the markets are testing. Maybe the markets wanted a firmer guidance. But this is the best he can do. "
"Maybe the other thing is there are no plans to lengthen the maturity of the QE asset purchases. If there was some discussion or even mention of that perhaps that would have helped as well to keep rates from moving higher."
KIM RUPERT, MANAGING DIRECTOR, GLOBAL FIXED INCOME ANALYSIS, ACTION ECONOMICS, SAN FRANCISCO
"The markets wanted to hear something different, the market is kind of setting up its own narrative. He didn't push back as strongly against the move that the markets were expecting, and he inserted a new word, 'disorderly.' We didn't hear that last week so that caught the market off guard and that is part of the problem as opposed to him saying anything hawkish or whatever."
"The market maybe was overly, optimistic isn't the right word, but maybe wanting something more than Powell was going to give. He really can't side one way or another, especially on market rates in saying that is an incorrect or not appropriate move. He did say the Fed monitors all kinds of rates."
(Compiled by the Global Finance & Markets Breaking News team)