Analysts at ANZ summed up Yellen's two-day testimony.
Key Quotes:
"FED #1: Chair Yellen’s Senate testimony was similar to yesterday. However, she did say that there will be a rise in long-term market rates during the balance sheet run off and that the Fed will factor in the yield curve when setting the funds rate. So eyes are on overall financial conditions.
FED #2: Governor Lael Brainard’s speech was similar to her 11 July commentary, erring on the side of caution. She noted that she is most focused on getting inflation back up to 2%. Dallas Fed President Kaplan also published an essay overnight which was also on the dovish side. Notably on inflation he said “I intend to be patient in critically assessing upcoming data to evaluate whether we are continuing to make progress in reaching our inflation objective...I would like to see some greater evidence that we are making progress toward meeting our 2 percent inflation objective in the medium term.” However, he “believe[s] it will likely be appropriate to begin the process of balance-sheet reduction sometime later this year.”
TROUBLE: What was notable out of Chairman Yellen’s talk was a reference to the US economy having trouble growing at 3%. That’s an implicit swat at productivity growth, which for a lot of nations is half what it was prior to the GFC. That’s not an environment for high returns."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD extends its upside above 0.6600, eyes on RBA rate decision
The AUD/USD pair extends its upside around 0.6610 during the Asian session on Monday. The downbeat US employment data for April has exerted some selling pressure on the US Dollar across the board. Investors will closely monitor the Reserve Bank of Australia interest rate decision on Tuesday.
EUR/USD: Optimism prevailed, hurting US Dollar demand
The EUR/USD pair advanced for a third consecutive week, accumulating a measly 160 pips in that period. The pair trades around 1.0760 ahead of the close after tumultuous headlines failed to trigger a clear directional path.
Gold holds below $2,300, Fedspeak eyed
Gold price loses its recovery momentum around $2,295 on Monday during the early Asian session. Investors will keep an eye on Fedspeaks this week, along with the first reading of the US Michigan Consumer Sentiment Index for May on Friday.
Bitcoin Cash could become a Cardano partnerchain as 66% of 11.3K voters say “Aye”
Bitcoin Cash is the current mania in the Cardano ecosystem following a proposal by the network’s executive inviting the public to vote on X, about a possible integration.
Week ahead: BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.