Wall Street Today | Powell: Private coins could compete with Fed digital dollar

Asian stocks looked set to follow a bounce in the U.S. after Federal Reserve Chair Jerome Powell reassured investors the central bank will tackle inflation to extend the economic expansion.

U.S. technology sector sold off sharply in the first week of the year. The Nasdaq 100 fell nearly into correction territory on Monday before rallying to snap a four-day losing streak.

Analysts broadly expect 2022 to be a tough year for high-growth tech names that have benefited from ultra-loose monetary policy. Goldman Sachs' chief U.S. equity strategist, David Kostin, said tech firms that have had huge sales but produce little profit are being sold by investors after a period of being highly sought after.

Last week saw U.S. equities endure their second-worst start to a year since the Lehman Brothers collapse, driven by further hawkishness from the Federal Reserve and a sell-off for highly valued U.S. tech stocks.

The rapid spread of the omicron Covid-19 variant around the world has also been a persistent cloud over the equity outlook in recent months. Despite this, analysts largely do not foresee a serious correction in 2022.

Shares of Albertsons, Kroger and Walmart fell on Tuesday, as investors worried that omicron-fueled worker shortages and supply chain delays would hurt major grocers. Albertsons CEO Vivek Sankaran said on an earnings call that the latest spike in Covid cases has delayed the recovery to more typical levels.

The omicron variant has exacerbated worker shortages in nearly every industry, from airlines to restaurants.

There's room for privately issued stablecoins to exist alongside a possible central bank digital currency, according to Federal Reserve Chair Jerome Powell. The Fed plans to publish a report on digital currencies in the coming weeks, Powell said at a Senate Banking Committee hearing on Tuesday.

When asked by Senator Pat Toomey, the top Republican on the panel, whether there's anything that would preclude a "well regulated, privately issued stablecoin" from coexisting with a potential Fed digital dollar, Powell said "No, not at all."

Wells Fargo said Tuesday that it was planning changes in the near future to minimize overdraft fees, including getting rid of fees for nonsufficient funds. JPMorgan has recently made changes to limit the costs of overdrafting. Customers can now overdraw up to $50 before incurring a fee.

The consumer price index is released by the Labor Department Wednesday and is expected to show headline inflation jumped by 7%, its fastest pace since 1982. The Federal Reserve is already on a path to raise interest rates to battle rising prices. A hot number should justify the Fed's policy shift.

"It's still hot, hot, hot, and it's important because we're now where the Fed worries about that 7% number getting baked into wages and getting more entrenched," said Diane Swonk, chief economist at Grant Thornton.

The reality television star and ex-boxing champion were paid to hype the blockchain-based digital tokens to their fans, "causing investors to purchase these losing investments at inflated prices," according to the complaint filed in Los Angeles federal court. Former Boston Celtic Paul Pierce was also named as a defendant in the suit.