(Adds Powell comments, updates markets)
By Ann Saphir
Feb 27 (Reuters) - Traders boosted bets the Federal Reserve will squeeze in a fourth rate hike this year after new Chairman Jerome Powell told a congressional committee that recent data has strengthened his confidence on inflation.
“I think each of us is going to be taking the developments since the December meeting into account and writing down our new rate paths as we go into the March meeting,” Powell said in his first congressional testimony as Fed chair. Incoming data suggests the economy is strengthening and labor markets are strong. “We’ve seen some data that will in my case add some confidence to my view that inflation is moving up to target; we’ve also seen strength around the globe and we’ve seen fiscal policy become more stimulative.”
The Fed is widely expected to raise rates next month and in December signaled a total of three rate hikes this year. Fed officials will release new forecasts, including their views on the appropriate future path of rate hikes, when they meet next month.
After Powell’s comments, traders of futures tied to the Fed’s target policy rate increase bets on three rate hikes this year and began pricing about a one-in-three chance for a fourth rate hike.
Rate futures maturing in 2019 also fell, as traders priced in further rates hikes then.
Traders continued to expect the first hike of the year to come next month. (Reporting by Ann Saphir in San Francisco; Editing by Chizu Nomiyama)