>> Engaging the appropriate path for monetary policy over the next few years. The FOMC will continue to strike a balance between avoiding an overheated economy.>> A new phrase uttered by a new Federal Reserve chairman. No one has talked about an, quote, overheating economy since way before the financial crisis sparked a global recession ten years ago.
But that's a risk reintroduced Tuesday in Powell's Congressional testimony, his first public comments since taking over the job from Janet Yellen. Reuters Fed correspondent, Jonathan Spicer.>> He was saying it in the context of the Fed trying to balance the risk of an overheating economy what with the tax cuts and the boost of fiscal spending with this need still after five years to get inflation up to target.
So you wanna get the message across that the Fed is going to stay on this sort of gradual rate hike path that its been on.>> But will he? Powell's attempts not to tip the Fed's hand and dispel fears the fed is shifting to a more aggressive stance was overlooked by his rosy view on the economy.
>> Data that suggests a strengthening in the economy. We've seen continuing strength in the labor market. We've seen some data that, in my case, add some confidence to my view that inflation is moving up to target. We've also seen continued strength around the globe and we've seen fiscal policy become more stimulative.
I would say that my personal outlook for the economy has stregthened since December.>> That may be what he said but investors heard something else. Stocks fell and bond yields rose, as Wall Street increased bets the Federal Reserve is now on track to boost interest rates four times this year instead of the three policymakers have been planning since the end of last year.