Yellen says Fed is reviewing Wells Fargo issues

Geronimo Vena
Luglio 14, 2017

Yellen said on Wednesday the US economy is healthy enough for the Fed to raise rates, though low inflation and a low neutral rate may leave the central bank with diminished leeway. Final demand prices were unchanged in May and rose 0.5% in April. However, on reflection, the market has considered there will be at least one more hike in the Fed Interest rate in 2017 and 3 in 2018, and for the time being has sold the United States dollars.

In regard to the central bank's plan to wind down its 4.5-trilllion-U.S. dollar balance sheet, Yellen reiterated that the balance sheet reduction will be conducted in a gradual and predictable way.

Such developments should raise resource utilization further to some extent, thus fostering a more robust pace of increase in wage and price, she said.

CURRENCIES: The euro fell 0.1 percent to $1.14 while the dollar was down 0.1 percent at 113.09 yen.

The dollar index rose 0.11 percent, with the euro down 0.42 percent to $1.1417.

"Markets are really biding their time until we get into tomorrow's more robust earnings releases", said Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank.

In what may be one of her last appearances before Congress, Ms. Yellen depicted an economy that, while growing slowly, continued to add jobs, benefited from steady household consumption and a recent jump in business investment, and was now being supported by stronger economic conditions overseas.

Record Highs for SPX Not Risk Dollar Break for AUD  USD Not EUR  USD

The Standard & Poor's 500 index gained 17.72 points, or 0.7 percent, to 2,443.25.

The U.S. Department of Labor reported Thursday that initial jobless claims fell by 3000 to 247,000 in the week ended July 7, missing forecasts of a 5,000 decline.

The Nasdaq Composite was up 9.88 points, or 0.16 percent, at 6,271.05. Analysts are forecasting that retail sales will grow 0.1% in June, up from a dismal -0.3% in May. Brent crude, used to price global oils, gained 22 cents, or 0.5 percent, to close at $47.74 per barrel in London.

Germany's benchmark 10-year Bund yield was back below 0.5 percent, having now given back a quarter of the rise triggered by last month's hint from Mario Draghi that the European Central Bank was preparing to scale back stimulus.

The remarks lit a fire under equities, with the Dow posting its highest close, on the prospect that money would continue to be cheap for the time being.

While he said it was a "minority view", some people are questioning whether Canada's hike will mean other commodity-bloc currencies like New Zealand and Australian will also follow suit. South Korea's Kospi gained 1.2 percent to 2,419.18.

In Asia, Hong Kong's Hang Seng index jumped 1.2 percent after a report showed that Chinese trade growth accelerated for a second month in June.

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