Thinking out aloud, in the FOMC press conference, am sure someone would likely ask Powell if there is any prospect of a rate hike this year given that inflation is looking to perk up again.
Would expect his response to be well calibrated, an uncommital to any such prospect, adding that any move would be data dependent. That would be interpreted as hawkish enough and possibly enough to cause a kneejerk downside jolt to equities. If he does not discount the prospect, it means it is possible and not ruled out. But on the other hand, if he downplays it and suggesting instead that the Fed is on course for a rate cut when appropriate this year, then that would be positive for the markets.
This is perhaps the last straw for Powell to jawbone the market lower to tighten financial condition, so he can rein back inflationary expectations. If you tell the market the Fed is open to a rate hike, that sends a strong message to Americans not to be loose with their spending as purse strings about to be tightened. If he was doing his job properly, I would expect him to do so.
