Stocks slip, dollar climbs as Fed chief makes debut

European and US stock markets dipped yesterday while the dollar rallied as investors dissected Federal Reserve boss Jerome Powell’s comments at his congressional debut.London ended the day down 0.1% at 7,282.45 points, despite a boost from US cable giant Comcast launching a surprise rival takeover bid for Sky, sending shares in the British satellite TV giant surging by more than a fifth in value.Paris slipped 0.01% at 5,343.93 points, while Frankfurt gave up 0.3% at 12,490.73 points.The EURO STOXX 50 closed 0.3% down at 3,454.51 points.Wall Street stocks were down in late morning trading, with the Dow shedding 0.2%. Jerome Powell said in prepared remarks at his debut appearance as Fed chairman in Congress yesterday that the US economic outlook is strong and that continued gradual increases in the key interest rate will help keep it on track.Powell said inflation has been held down by temporary factors but is set to rise this year closer to the 2% goal, as wage gains also accelerate at long last.The Fed raised the benchmark interest rate in December, and has indicated that three rate hikes are expected this year.However, that was before strong wage gains in the January employment report fuelled fears the Fed will have to raise rates faster to head off inflation.That sparked a plunge on equity markets which wiped trillions off valuations worldwide, with share prices having gradually recovered in the past couple of weeks.Many economists now expect four US rate hikes in 2018, with the first coming at the policy meeting in late March.While Powell gave no hint in his testimony of the number of increases he expects, he was bullish on the outlook, noting that “some of the headwinds the US economy faced in previous years have turned into tailwinds”. Analysts at ING said Powell’s written testimony suggest ongoing gradual rate hikes, but that there are hints of “upside risks” for additional increases to interest rates.While equities wavered, the dollar pushed higher against its major rivals.In Asia on Tuesday, Tokyo stocks enjoyed fresh gains after another strong Wall Street performance on Monday, but most other regional markets struggled to maintain momentum.In London, star performer Sky rocketed more than 20% higher to £13.31 on the prospect of a bidding war between Comcast and Rupert Murdoch’s 21st Century Fox.Comcast has outgunned Murdoch’s entertainment giant with an all-cash offer of £12.50 per share for Sky, or more than £22bn ($31bn, €25bn) overall.That is substantially more than the £10.75 per share or £11.4bn that Fox has offered for the 61% of Sky it does not already own.