*
Futures up: Dow 0.08%, S&P 0.17%, Nasdaq 0.25%
March 7 (Reuters) - U.S. stock index futures edged
higher on Tuesday, ahead of Federal Reserve Chair Jerome
Powell's testimony before Congress that could shed more light on
the central bank's plans for raising interest rates.
The benchmark S&P 500 closed higher for a third
straight session on Monday, as Treasury yields took a breather
from their recent rally that was driven by expectations of the
Fed holding interest rates at a higher level than many had
expected at the start of the year.
Powell will testify before the Senate Banking Committee at
10:00 a.m. ET (1500 GMT), with investors focused on whether he
remains confident about the Fed's moves for bringing inflation
towards its 2% target.
Powell said at his last press conference that a
"disinflationary process" had begun, while cautioning the
central bank's fight against rising prices was not over.
Inflation data since Powell's Feb. 1 remarks has shown
prices have not fallen by as much as analysts were expecting,
while the labor market has shown signs of resilience.
"We expect Mr. Powell to reiterate that further rate hikes
are needed and, if the data were to continue to surprise to the
upside, the peak rate would likely need to be higher than the
central bank had previously expected," Unicredit analysts said.
"In our view, the bar for re-accelerating the pace of rate
hikes is high and the Fed would prefer a shallower path and to
hold policy tight for longer, if necessary."
The yield on two-year Treasury notes , which best
reflects short-term rate expectations, hit its highest level
since 2007 at 4.94% last week and has been hovering below that
level. Recent economic data and comments from Fed policymakers have
prompted traders to reassess the path of rates, with money
market futures pricing in a 28% chance of the central bank
increasing rates by a bigger 50 basis points in March, according
to CME Group's Fedwatch tool.
Traders see Fed fund rates peaking at 5.46% by September,
from the current rate of 4.67%. Data later this week is expected to show nonfarm payrolls
increased by 200,000 in February, compared with the much
stronger-than-expected 517,000 jobs reported in January.
At 5:07 a.m. ET, Dow e-minis were up 26 points, or
0.08%, S&P 500 e-minis were up 6.75 points, or 0.17%,
and Nasdaq 100 e-minis were up 30.75 points, or 0.25%.
Among individual stocks, Rivian Automotive fell
6.0% in premarket trading after the electric automaker unveiled
plans to sell bonds worth $1.3 billion.
Meta Platforms Inc gained 1.7% after Bloomberg News
reported the company will cut thousands of jobs as soon as this
week in a fresh round of layoffs.
(Reporting by Sruthi Shankar in Bengaluru
Editing by Vinay Dwivedi)
