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Good morning. Jerome Powell delivers a hawkish surprise, China overhauls its bureaucracy and the UK considers tax changes for business investment. Here's what people are talking about.

Chair Jerome Powell said the Federal Reserve is likely to lift interest rates higher and potentially faster than previously anticipated with inflation persisting, an unexpectedly aggressive posture following last month's step down in the pace of hikes. The remarks, coming in testimony before Congress on Tuesday, opened the door to officials lifting the Fed's benchmark lending rate by a half percentage point at the next meeting if upcoming reports on jobs and prices show rate hikes have done little to cool the economy. Investors quickly assessed the implications for global markets.

President Xi Jinping overhauled China's bureaucracy as part of a sweeping push to make the economy more self-sufficient and resilient in the face of US efforts to prevent Beijing from obtaining advanced technology. The plan released Tuesday strengthened oversight of its $60 trillion financial system, created a new agency to manage data and restructured the Ministry of Science and Technology. The objective is to "better allocate resources to overcome challenges in key and core technologies, and move faster toward greater self-reliance in science and technology," the official Xinhua News Agency said.

Chancellor of the Exchequer Jeremy Hunt is considering giving British firms extra tax relief on investment spending as he seeks measures to boost economic growth in his spring budget. Hunt is reviewing a series of potential changes to the UK's capital-spending allowances to encourage business investment, according to two people familiar with the matter, who asked not to be named discussing confidential plans. No final decisions have been made and Hunt is constrained by a tight fiscal picture, they added.

Intel is seeking an additional 4 billion to 5 billion euros in subsidies from the German government to move ahead with a chip manufacturing complex in the eastern part of the country, according to people familiar with the matter. The chip designer had already reached a deal to build a plant in Magdeburg with 6.8 billion euros ($7.2 billion) in government subsidies, subject to approval from the European Commission. But it postponed the start of construction on the project at the end of last year due to economic headwinds.

European shares face a rocky open after hawkish comments from Federal Reserve Chair Jerome Powell. ECB President Christine Lagarde speaks alongside WTO Director-General Ngozi Okonjo-Iweala at an International Women's Day event. The EU will seek to rein in generous spending by member states when the bloc's executive arm issues fiscal guidance for 2024. Data include Euro area GDP and Spain's house prices, plus retail sales for Germany and Italy. Adidas, Continental and Thales are set to unveil earnings.

This is what's caught our eye over the past 24 hours

Ken Griffin sees setup for recession after 'traumatic' inflation.
Deepest bond yield inversion since Volcker suggests hard landing.
Trafigura is doing a 'major' audit of nickel fraud missteps.
Musk is targeted by FTC for deposition in Twitter privacy probe.
The debt ceiling is the risk Wall Street doesn't want to ponder.
UK grid uses back-up coal for first time as cold snap hits.
Biden to unveil UK-Australia submarine deal Monday in San Diego.

Natural gas prices in Europe have been trending lower for much of this year — even contracts for next winter are retreating with high inventories meaning less need to refill in coming months. And yet Britain's National Grid called on a reserve coal-fired station for the first time after the country's power market failed to provide enough electricity.

The use of the backup coal plants highlights a key conundrum inherent in the pursuit of carbon-free economies. Wind, solar and other renewable sources offer unpredictable supplies, often failing when demand is highest. That leaves a choice between backup generation from old, dirty technology and nuclear — both of which attract negative attention.

This commentary first ran on Markets Live on the Bloomberg Terminal, where Eddie van der Walt is Deputy Managing Editor based in London. Follow him on Twitter at @EdVanDerWalt

MLIV Pulse survey: This week, we focus on China's markets and economy. Will China's recovery be inflationary, disinflationary or irrelevant for global prices and bonds? Will the country meet or beat the 5% GDP target? Share your views here.