On Tuesday, Fed Chairman Jerome Powell, who has been nominated for another four-year term, will take part in a confirmation hearing for the nomination, and Powell is set to be grilled by the Senate over the sharpest turn in the Fed's sharpest policy tightening in decades. Powell, 68, who enjoys broad bipartisan support and is expected to be easily confirmed for the nomination, is expected to be asked by members of the Senate Banking Committee to answer questions ranging from when to start raising interest rates to whether to adopt a climate-related approach. Risk-bundled bank capital standards, etc. The hearing will begin at 10:00 Washington time.

Fed Vice Chairman Richard Clarida intends to resign from the board on Jan. 14, two weeks before his term expires. Clarida's unexpected early departure comes after it was revealed last week that she had sold at least $1 million in a U.S. equity fund in February 2020. But a few days later, on the eve of a major Fed announcement, he bought about the same amount in the fund. While his buy was previously disclosed and reported by Bloomberg News in October, the previous sale first appeared in a revised financial disclosure form filed with the government last month.

According to the latest consumer survey data from the Federal Reserve Bank of New York, U.S. consumers' inflation expectations for the year ahead remained at a record high of 6 percent. Inflation expectations for the next three years were also unchanged at 4%. The survey showed households are increasingly optimistic about the job market, expecting higher wages and better job prospects. Data from the Labor Department on Wednesday is expected to show consumer prices rose 7 percent in December from a year earlier, the largest increase since 1982. Continued high inflation that has caught the Fed and many economists by surprise in recent months has led the central bank to turn to tighter monetary policy to help cool prices. In the New York Fed's December survey of consumer expectations, households in the South and West expected higher inflation than in the Midwest and Northeast.

A lot of money has been poured into the U.S. short-term fixed-rate market as traders see a strong chance of a rate hike by the Federal Reserve at its March monetary policy meeting. Before that, some bank strategists, including Goldman Sachs, revised their forecasts, expecting the Fed to raise interest rates four times this year. Traders are chasing those expectations, piling into federal funds futures for February delivery, resulting in a surge in open interest. As of Friday's close, the contract had more than 200,000 open positions and a notional value of more than $1 trillion. This is the most of any period ending in June 2023. The contract, which expires on Feb. 28, is of interest because it is the last federal funds futures contract to expire before the Fed's March 16 rate decision.

Bitcoin fell below $40,000 for the first time since September, marking its worst start to a year since the digital currency era. The cryptocurrency fell as much as 6 percent to $39,774 in New York trading, bringing the year-to-date decline to about 14 percent and its biggest start to the year since at least 2012. Ethereum was lower, with the Bloomberg Galaxy Crypto Index falling for a fourth straight day. “Cryptocurrencies are likely to remain under pressure as the Fed reduces liquidity injections,” said Jay Hatfield, CEO of Infrastructure Capital Advisors. "Bitcoin may fall below $20,000 in 2022." Bitcoin was created by a person or organization named "Satoshi Nakamoto" after the 2008 global financial crisis and began trading in 2009, but early price information was very limited .

Russian and U.S. diplomats concluded a first round of major talks over Russia's broad security demands amid threats from Russia's Chen Bing on the Ukrainian border, with both sides expressing an interest in continuing the talks. U.S. Deputy Secretary of State Wendy Sherman said Monday's nearly eight-hour talks in Geneva were "frank and direct" but suggested it would take at least a few weeks or more to make a major breakthrough. Russian Deputy Foreign Minister Sergei Ryabkov echoed the generally upbeat comments, calling the talks complex and professional and saying he believed the United States agreed to consider Moscow's proposal "very seriously."

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