New head, new Fed? How Powell is ushering in a new era at the Federal Reserve

Out with the old, and in with the new. It appears that Jerome Powell is ushering in an entirely different era at the Federal Reserve, in more ways than the obvious leadership transition.

The beginning of his tenure has been defined by ramped up market volatility, a pickup in rates and the consensus that inflation is ticking higher after a prolonged period of price suppression.

Unlike his predecessor Janet Yellen, Powell has unambiguously signaled that the Fed focus has switched from nurturing growth to controlling inflation. While early 2018 data have yet to show a marked pickup in prices, the trend has been inexorably higher.

The most recent monthly reading of core personal consumer expenditures, the central bank's preferred inflation gauge, on Thursday morning posted its largest month-over-month gain in a year. On the other side of the coin, workers' incomes are rising due to tax cuts and to hikes in minimum wages.

All of this suggests the markets may be grossly underestimating the Federal Reserve's resolve to hike interest rates, which may impact a variety of asset classes.

The 10-year Treasury yield has a good chance of breaking above the 3 percent threshold, the dollar may have just found a floor, and the market volatility seen in February could be just the beginning of a rocky year ahead.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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