Powell & Moderna rattle financial markets

<p>Kia ora,</p><p>Welcome to Wednesday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the Fed boss said the regulator can move faster unwinding its stimulus.</p><p>In <a href="https://www.federalreserve.gov/newsevents/testimony/powell20211130a.htm" target="_blank"><strong>Congressional testimony</strong></a> today, the head of the US Fed painted the standard picture of "the economy has continued to strengthen" and "inflation will move down significantly over the next year", but he did acknowledge the downside risks of Omicron and "increased uncertainty for inflation". He also suggested that higher inflation justifies a faster unwinding of QE. Markets reacted by seeing a higher and earlier chance of interest rate rises from the Fed, and have re-rated pricing risks. Commodities and bond yields and equities all are falling, and quite sharply as a risk-off tone sweeps over markets.</p><p>The widely-watched <a href="https://www.conference-board.org/data/consumerconfidence.cfm" target="_blank"><strong>Conference Board consumer sentiment survey</strong></a> is reporting a slippage in the US, more than the expected hold, and it is being attributed to the bite of inflation. A fall at this time is magnified because it is in the heart of the holiday retail season.</p><p>There was also an unexpected retreat in the Chicago PMI <a href="https://s3.amazonaws.com/images.chaptermanager.com/chapters/b742ccc3-ff70-8eca-4cf5-ab93a6c8ab97/files/mni-chicago-press-release-nov-2021.pdf" target="_blank"><strong>reported</strong></a> overnight, which noted a slowdown in new orders, and no respite from the cost increases.</p><p>Meanwhile, Canada <a href="https://www150.statcan.gc.ca/n1/daily-quotidien/211130/dq211130a-eng.htm?HPA=1" target="_blank"><strong>reported</strong></a> a better than expected Q3 GDP economic expansion. This was underpinned by good household spending and e