Federal Reserve Chairman Jerome Powell already has had his first stern test from the market. Soon, he'll face another one on Capitol Hill.
First up, though, for the central bank chief is how the market reacts to more detailed information from the last meeting over which his predecessor, Janet Yellen, presided.
The Federal Open Market Committee on Wednesday afternoon releases minutes from the Jan. 30-31 meeting, and investors will be watching closely. Following the policymaking session, the committee released a statement indicating incrementally stronger confidence in the path of inflation and the pace of rate hikes.
After the meeting, stocks began an extended sell-off that took the major averages briefly into a correction, or 10 percent below their most recent high. Though the market has recovered, questions remain about inflation and how the Fed will react.
"The market will be posed to move off any hints with respect to the future path of rates and upward revisions," said Joe Brusuelas, chief economist at RSM. "This meeting followed the tax cuts but before the most recent orgy of spending on the part of the governing party in Congress and the White House. We'll want to see the assessment on the fiscal path."
On a broader level, investors will be looking for direction on philosophy. Namely, they want to know what similarities and differences there will be from the cheap money and bountiful liquidity policies of Yellen and her predecessor, Ben Bernanke, and the new regime under Powell's direction.
"The minutes are the last echo of the Bernanke-Yellen era," Brusuelas said. "Forward-looking investors should start preparing for a return of normal volatility to markets, which is healthy. The idea that the Fed will be there to limit volatility in the way it has over the past decade … may change."
Members of Congress, many of whom have criticized the Fed harshly as it has sought to stage-manage the economy, will get their own chance to peer inside Powell's head a week from now.
The Fed chairman makes his semiannual address to House and Senate members starting Feb. 28, with his prepared remarks to be released Friday. For both Wall Street and Washington, it will be an important chance to get a sneak preview on a new era.
"What the market wants to hear is that the Fed will continue the gradual approach begun by Chair Yellen," said Quincy Krosby, chief market strategist at Prudential Financial. "The thing that she was very clear about was not to surprise the market, to make certain that the market got the message."
That message under Bernanke and Yellen was that the Fed would err on the side of caution in that it would rather be late normalizing policy than early.
Consensus opinion holds that Powell will offer more of the same. However, some Wall Streeters have taken notice of remarks Powell made in 2012 when he doubted the efficiency of the Fed's low-rate money-printing policies and worried over the long-term damage they might cause.
"The reason he is different from Janet Yellen and Ben Bernanke is that he has worked in markets and he has a grasp of how the markets work and how they function and the relationship between the Fed and markets," Krosby said. "Because he has been with the Fed for a number of years, he understands the balance between the two."
Indeed, Powell brings an unusually varied background to the leadership position though he is not an economics Ph.D. like most of his predecessors. He is both a former investment banker and Treasury official and probably was the next-safest pick President Donald Trump could make once he chose not to renominate Yellen.
Yet the market is bracing for the real possibility that the Fed could be remade. Carnegie Mellon economist Marvin Goodfriend has been nominated for one FOMC vacancy, and if confirmed he would be seen as a departure from the status quo.
Also, Cleveland Fed President Loretta Mester, one of the committee's more hawkish members, has lately been considered among the favorites for vice chair.
For Powell, then, his main goal may be not to shake anything up during his congressional test.
"What you really want to see is if Powell himself is part of the more hawkish wing or in the middle like Yellen," said Doug Roberts, chief investment strategist at Channel Capital Research. "The danger you have is all of a sudden he makes a rookie mistake that he doesn't think is a big deal and has a major impact on the market."