Powell just wrapped up his Capitol Hill testimony — here's what experts are watching now

Federal Reserve Chairman Jerome Powell's semiannual testimony to Congress gave Wall Street experts just what they wanted: a cool, collected central bank leader who preached patience over punch.

Here are takeaways from three market watchers:

  • Michael Arone from State Street Global Advisors: "The Powell put lives and breathes and is well," he said on CNBC's "The Exchange." "In reaction to what was an incredibly volatile period at the end of last year, Powell came in his testimony and assured markets that they would be patient, that the balance sheet was going to be much bigger than it was previously, and the path forward on the balance sheet is likely to be a lot slower, if not even stop. So despite the fact that fundamentals for the market continue to deteriorate some, it seems as though the Fed is willing to kind of keep the punch bowl at the party for a while longer."
  • Societe Generale's Omair Sharif, also on "The Exchange": "I think, if you go back to the press conference in January, Powell was asked about what it would take to get him to hike rates, or the Fed to hike rates, later on this year. And he actually said, 'I'm going to need to see an argument for rate increases,' and a big part of that for him was inflation. ... And, right now, it doesn't look like inflation's really a threat even moving forward, so what exactly is the need for rate hikes right now? So, why not be patient?"
  • Peter Lazaroff of Plancorp, on CNBC's "Power Lunch": "Just as important as the calculus behind the balance sheet management is the psychology that they're trying to control. Because I think if the Fed could control all parts of the yield curve, they certainly would, and that's what they're trying to do. ... I think that Powell's done a great job in testimony this week of explaining [to] everybody where they stand, saying 'we have a plan.' I expect we would see it certainly by the March meeting. But I think, generally, that's given investors a lot of confidence, particularly with the trade talk stuff. Because I think we'll always see something that says we made a deal; I think what we're at risk of is seeing something that that deal doesn't really have any teeth, because we're asking a lot of China and that's going to be hard for them to stomach and I think it would be a little naive to expect that we're going to just automatically go to that place."

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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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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