Today on Capitol Hill, the oracle spoke. Investors panicked at what they thought they heard. Stocks tanked across the board.

It brings to mind the ancient Romans. They were a superstitious and pagan people, seeing portents in a wide variety of objects, both inanimate and living. Notably, they believed the future could be told from animal remains. The Romans were easily frightened by the slightest omens.

On Tuesday, in marble buildings evocative of that bygone empire, American policymakers displayed a similar obsession with cryptic portents.

In congressional testimony today, Federal Reserve Chair Jerome Powell hinted…he merely hinted…that the central bank would raise interest rates at least four times this year. The original plan was for three rate hikes, but Powell indicated that an overheating economy could compel more aggressive tightening. He noted that growth is robust and inflation is approaching the Fed’s 2% target.

Powell’s remarks were elliptical. He was vague about the central bank’s next move. But his testimony was enough to spook Wall Street. After reading the entrails, investors dumped stocks.

The Dow Jones Industrial Average, S&P 500, and Nasdaq all ended the day in the red. Stocks started the trading session flat, but the more Powell spoke, the further equities dropped. The benchmark U.S. 10-year Treasury yield rose to 2.89%.

Economic data are positive. Paradoxically, that’s the problem.

The Conference Board reported on Tuesday that its measure of consumer attitudes on current and future economic conditions increased to 130.80 in February, up from 124.30 in January. This latest reading is the index’s highest since November 2000, when confidence peaked at 132.60. The consensus forecast had been for a reading in February of 127.3. It’s the first time the index has surpassed 130 since Bill Clinton was president (see chart).

The economic recovery is nearly nine years old and unemployment is at a 17-year low of 4.1%.

Companies are in hiring mode to meet rising demand. Employers are paying higher salaries to compete for skilled workers in a tight job market.

The GOP’s tax overhaul should provide a shot of steroids for the economy. However, the $1.5 trillion in tax cuts could overheat the economy.

Powell told lawmakers Tuesday that he would “strike a balance” between the danger of an over-revved economy and the need to nurture growth. But he also suggested that economic growth probably would warrant more frequent tightening than initially planned.

Powell was President Trump’s pick to succeed Janet Yellen. Powell steps into the job during the late stage of an economic recovery.

Underscoring the resilience of the recovery are strong corporate earnings. For the fourth quarter of 2017, with 90% of S&P 500 firms reporting actual results, 74% have reported positive earnings per share surprises and 78% have reported positive revenue surprises.

For the quarter, the blended earnings growth rate for the S&P 500 is 14.8%. Looking at future quarters, analysts currently expect earnings to grow at double-digit levels through 2018.

Powell’s first semi-annual testimony to Congress on Tuesday came at a delicate time for financial markets. Stocks have swayed wildly in recent weeks on concerns about inflation and rates.

The CBOE Volatility Index (VIX) on Tuesday spiked 17%, its largest gain in more than two weeks. Traders remain jumpy. The correction probably isn’t over.

Julius Caesar was warned by a soothsayer to “Beware the Ides of March,” which in ancient Rome equaled March 15. The Roman dictator scoffed, but that’s the exact day on which he was killed.

As March looms on the calendar, this bull market might be a prime assassination target, too. It’s a matter of history, not superstition: bull markets die at the hands of rising interest rates. Heed the warning.

Tuesday Market Wrap

• DJIA: -1.16% or -299.24 points to close at 25,410.03
  
• S&P 500: -1.27% or -35.32 points to close at 2,744.28
  
• Nasdaq: -1.23% or -91.11 points to close at 7,330.35
  

Tuesday’s Big Gainers

• Dillard’s (NYSE: DDS) +16.86%

Retail chain excels on earnings.

• Mallinckrodt (NYSE: MNK) +15.26%

Drug maker beats on earnings.

• LSB Industries (NYSE: LXU) +11.62%

Chemical firm issues stellar operating results.

Tuesday’s Big Decliners

• California Resources (NYSE: CRC) -21.85%

Energy producer’s cash flow plunges.

• Fitbit (NYSE: FIT) -12.36%

Fitness device maker issues disappointing guidance.

• Intrepid Potash (NYSE: IPI) -10.92%

Fertilizer maker reports mixed quarterly results.

Letters to the Editor

“Thank you for your timely updates on the new tax bill. However, the ‘death tax’ wasn’t mentioned at all. Are there no changes or did you miss the subject?” — Peter F.

Space allows me to only cover so much. To answer your question:

The tax bill temporarily doubles the exemption amount for estate, gift and generation-skipping taxes from the $5 million base, set in 2011, to a new $10 million base, good for tax years 2018 through 2025. The exemption is indexed for inflation, so an individual can shelter $11.2 million in assets from these taxes.

A quick note: opponents of the estate tax like to use the pejorative term “death tax.” That’s political gamesmanship. Largely because of its generous exemption levels, only the wealthiest 0.2% of estates pay any estate tax.

Questions about tax overhaul? Send me an email: mailbag@investingdaily.com

John Persinos is managing editor of Personal Finance and chief investment strategist of Breakthrough Tech Profits.