Yahoo Finance's Brian Cheung joins Kristin Myers to break down the latest comments from Fed Chairman Jay Powell.

Video Transcript

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KRISTIN MYERS: Welcome back to "Yahoo Finance Live." Let's take a look at the live market action right now, because we are seeing the sell-off intensify after Jay Powell's remarks a little bit earlier today on inflation. As you can see there, the NASDAQ down over 3% right now. The Dow down over 650 points. Right now, on a sector basis, energy is the only sector in the green, up over 8/10 of a percentage point right now. Crude touching $64 a barrel.

So let's get into what Fed Chair Jay Powell said today. We have Yahoo Finance's Brian Cheung here with an update and some details on what's got the markets going crazy right now. Hey, Brian.

BRIAN CHEUNG: Hey, Kristin. Well, yeah, I mean, we were seeing that action as the Fed chairman was speaking at the top of the 12:00 PM hour here in the East Coast. And his remarks were pretty much the same as what he said before though. I want to read you the one quote that he said that stood out to me.

He said, quote, "I want to be clear about this. If we do see what we believe is likely a trend transitory increase in inflation, where longer-term inflation expectations are broadly stable at levels consistent with our framework and goals, I expect that we will be patient." So the P word, patient, is the key word there.

Again, it's not necessarily new. We know that the Federal Reserve has signaled that it has no eagerness to want to raise interest rates any time soon, especially if inflation tilts above its 2% target. The Fed says it's going to be OK with that. But again, nothing particularly new. The Fed's been saying that for months now.

I guess the question is whether or not that $1.9 trillion stimulus is really going to cause a snap-up in consumption beyond maybe what the Federal Reserve is expecting. We're watching the 10-year yield spike up to 1.54% as the sell-off is happening. A very interesting dynamic there, Kristin.

KRISTIN MYERS: Absolutely. The 10-year bond right now up 4 and 3/4 of a percentage point. Really quickly, Brian, I want to toss that question back to you. If we've heard the Fed chair say these remarks before, nothing new out of this speech, and that inflation is meant to be transitory, meaning temporary, some of these rises, why then do we see this market sell-off today?

BRIAN CHEUNG: And that's the golden question, right? If we've heard the same thing, why is this happening, one explanation could be that this weird dynamic-- which, again, you don't usually tend to see bond yields go up when there's a sell-off in the market. If it's a risk-off type of environment, you usually tend to see bond yields go down as investors try to pour into fixed incomes relatively risk-free, safe assets.

So one interpretation of this might be people are expecting the opening of the economy to be quite vigorous, but that not at levels that the equities market has been justifying. We've seen a pretty incredible run-up in stocks across the board, specifically tech stocks, obviously in the midst of the pandemic. Maybe people said valuations in the autumn of last year were the peak and that maybe this is the top here. So they're trying to take some of those profits out and cash out, but, again, we really don't know there might be some technical issues with this, as well.

KRISTIN MYERS: Right. Thanks so much, Yahoo Finance's Brian Cheung.