The Senate Banking Committee will hold separate hearings next week for Jerome Powell on his nomination to a second term as Federal Reserve chair and for Lael Brainard’s elevation to vice chair.

Two days after one of the Federal Reserve’s most hawkish pivots in recent years, the rates market is already calling the central bank’s bluff.

Investors responded to the Federal Reserve’s intent to tackle inflation with a clear risk-on pivot, as stocks climbed and Treasuries steadied.

The hottest rate of inflation in four decades has ushered in a wilder era of bond-market volatility, causing investors to shop for hedges to protect their portfolios.

Prospects that inflation will be held in check may weigh against the need for the Fed to speed up the process of policy tightening.

He also told the Senate that he wanted to retire the word “transitory” to describe price increases, and he said inflation pressures will “linger well into next year.”

Jerome Powell’s appetite for a faster tapering of Federal Reserve stimulus is casting him in a role financial markets haven’t seen since 2018: hawk.

The FOMC decided to leave interest rates near zero and begin scaling back the pace of purchases in the $120-billion-per-month bond-buying program it launched last year, with an eye toward completing the process by mid-2022.

Offsetting the weak job-creation number were an upward revision to August payrolls, a bigger-than-expected drop in unemployment and a faster pace of wage growth.

Republicans believe there’s enough time left if Democrats start Wednesday or Thursday, a GOP aide said on condition of anonymity. Republicans could keep the vote-a-ramas very limited to keep things moving along.

The bond-market influencer has for months urged the Fed to reduce its asset purchases before inflation runs rampant and batters financial markets.

The key benchmark that the Federal Reserve targets to control monetary policy dropped for the second time in two weeks, an indication that the glut of cash in the front-end is starting to spill into this corner of the funding markets.

The bond market isn’t fully buying the hawkish shift from Federal Reserve officials in recent days.

This year’s stress tests examined 23 banks including JPMorgan Chase and Goldman Sachs, with the remainder of the firms on an “every other year” test cycle. The capital requirements for those remaining firms are unchanged from last year.

The Treasury Department on Wednesday will announce its so-called quarterly refunding of longer-term securities, when it typically lays out any coming changes to debt-issuance strategy.

Sens. Sherrod Brown and Elizabeth Warren criticized Federal Reserve Chair Jerome Powell over reg relief policies instituted by the central bank, signaling that some progressive lawmakers may be reluctant to give him a second term.

The U.S. economy will likely meet the Federal Reserve’s threshold for tapering its asset purchases sooner than people think, said Dallas Fed President Robert Kaplan.

Inflation risks may warrant the Federal Reserve beginning raising interest rates next year, St. Louis Fed President James Bullard said, backing an even-earlier liftoff than penciled in by many of his colleagues.

Federal Reserve Chairman Jerome Powell said the market dislocations of the past year resulting from the pandemic had changed the impact that the supplementary leverage ratio was having on the largest banks. After temporarily easing the requirement, the central bank is considering longer-term reforms.

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