Yellen revives hopes for March rates hikes

Federal Reserve Chair Janet Yellen gave her semi-annual monetary policy report to Congress on Tuesday before the Senate Banking Committee highlighting the following:
1- Hawkish sentiments continues
2- Markets price in June rate rise and elevate expectation for March
3- Agreement with Trump’s core principles on financial regulation
4- Little details on the Fed balance sheet
5- Policy changes provide considerably uncertainty.

Yellen’s testimony noted that the economy has continued to make progress toward the Fed’s objectives of maximum employment and price stability. In addition; Yellen assures that waiting too long on the interest rate hikes is “unwise” however there are no details of how and when the Fed will impose the rate.

Banks rallied after the Federal Reserve chair said that the Fed intends to raise rates three times this year, and possibly even in March. Goldman Sachs Group Inc. closed at a record high for the first time since before the financial crisis, as economists raised their odds of a March rate hike to 20 percent from 15 percent.

The comments saw the dollar move 0.36% higher against a basket of major currencies; while analysts suggesting Yellen had been more aggressive than expected in her testimony.

The rally in the global equity market gained momentum after Yellen told congress that the central bank doesn’t need to wait for Trump’s plans on fiscal stimulation before resuming rate hikes.

Yellen refrained from dwelling on the topic about Trumps latest tax reform plans; and noted the importance of improving the pace of longer-run economic growth and raising American living standards and encouraging local productivity. She added that policy changes are among the sources of “considerable uncertainty” for the economic outlook.
Yellen’s testimony noted that the economy has continued to make progress toward the Fed’s objectives of maximum employment and price stability. In addition; Yellen assures that waiting too long on the interest rate hikes is “unwise” however there are no details of how and when the Fed will impose the rate.
Banks rallied after the Federal Reserve chair said that the Fed intends to raise rates three times this year, and possibly even in March. Goldman Sachs Group Inc. closed at a record high for the first time since before the financial crisis, as economists raised their odds of a March rate hike to 20 percent from 15 percent.
The comments saw the dollar move 0.36% higher against a basket of major currencies; while analysts suggesting Yellen had been more aggressive than expected in her testimony.
The rally in the global equity market gained momentum after Yellen told congress that the central bank doesn’t need to wait for Trump’s plans on fiscal stimulation before resuming rate hikes.
Yellen refrained from dwelling on the topic about Trumps latest tax reform plans; and noted the importance of improving the pace of longer-run economic growth and raising American living standards and encouraging local productivity. She added that policy changes are among the sources of “considerable uncertainty” for the economic outlook.

Leave A Reply

Your email address will not be published. Required fields are marked *