Since then, slower growth around the world and increased market volatility have delayed moves to “tighten” or “normalize” USA monetary policy.
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Yellen said the recovery appears to be picking up steam after losing momentum in the first quarter of the year. The Fed will continue to monitor incoming data and will asses the risks to the outlook, she said.
HONG KONG (AP) – Global stock markets rose modestly on Friday as the investment outlook remained uncertain ahead of US economic data and remarks by the head of the Federal Reserve.
The dollar rose 0.5% to ¥110.96 after earlier notching a fresh one-month higher of ¥111.03.
Her comments also were largely in tune with a chorus of other Fed officials who have indicated in recent weeks that policymakers could resume raising rates as soon as next month.
Since December, when the benchmark federal funds short-term rate was raised for the first time in more than nine years, to 0.25-0.50 percent, the Federal Open Market Committee has demurred from more hikes as the economy went through a rough patch.
Economists expect United States employers to have added 170,000 jobs in May, slightly more than they did in April, and hourly wages to show a 0.2% increase from the previous month.
Yields on two-year notes, the coupon securities most sensitive to Fed expectations, rose four basis points, or 0.04 percentage point, to 0.91 per cent as of 2 pm NY time, according to Bloomberg Bond Trader data. Traders also took some encouragement with report showing the pace of GDP growth in the first quarter was upwardly revised to 0.8 percent from the initial estimate of 0.5 percent.
Longer term, however, negative interest rates should boost gold, said John Ciampaglia, executive vice-president of corporate development for Sprott Inc.
Meanwhile, the USA dollar fell to 1.4631 against the pound, from an early 6-day high of 1.4599 and held steady thereafter.
On Friday, Yellen said those factors “seem like they are roughly stabilising at this point and my own expectation is that… inflation will move back up over the next couple of years to our 2 per cent objective”.
During a panel discussion, Yellen reaffirmed the Fed’s policy of slowly increasing rates.
With many of her colleagues shifting gears in recent days and pointing squarely at a rate hike in June or July, Yellen on Friday afternoon has a chance to further prepare markets and the public in an appearance where she receives the Radcliffe Medal from Harvard University’s Radcliffe Institute for Advanced Study.
“We would have limited scope”, she said.
Her comments were backed by St. Louis Federal Reserve President James Bullard on Monday.
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The FOMC will meet on June 14-15.
