Fed Chair Powell had a few difficult moments, but overall the House Financial Services Committee did not make his testimony very difficult. However, it is clear that the Fed is still unable to look objectively at its own role in the SVB collapse. It is up to Congress to address this issue more forcefully. 

Regarding monetary policy, we still have our doubts about the timing, given that Powell wants a more moderate pace of the hiking cycle. 

While we expect the Fed to hike in July, a more moderate pace would imply skipping September and that would leave us with November as the meeting for the second hike. However, even the Fed’s own staff expects the economy to be in a mild recession by then. Therefore, we continue to leave a second hike out of our forecasts.