Stocks rose in morning trading Friday following two days of declines after Federal Reserve Chair Janet Yellen gave an upbeat assessment on the US economy.
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The Dow was down 0.3%, or 49.93 points, to 18,398.48 at 1:11 p.m.
In a speech earlier Friday, Yellen said the case for raising rates has strengthened in recent months.
Dr Oliver said capital spending intentions data will be watched closely for any improvement in the outlook for non-mining investment.
Continued and solid job growth in the United States has made it more likely that the Federal Reserve will raise its short-term interest rates in the coming weeks or months. She also described consumer spending as “solid”, but noted that business investment was weak and exports were taking a hit from a strong US dollar.
Her remarks raised the likelihood that the Fed will increase the rate from its current ultra-low 0.25-0.50 per cent level by the end of the year, and as early as its next meeting in September.
She also reiterated that the decision on interest rates will “always depend on the degree to which incoming data continues to confirm the Fed policy committee’s outlook”. The Fed chair didn’t discuss the specific timing of a rate move in her first public comments since June.
Making its first hike in almost a decade, the US Federal Reserve raised rates last December, but has avoided further increases so far this year owing to the continuing global economic slowdown and volatility in major financial markets.
Hunter pointed to a government report Friday that the economy, as measured by the gross domestic product, grew at an anemic 1.1 percent annual rate last quarter as evidence that the Fed likely wants to see stronger growth. She added that the FOMC expected the inflation to rise to 2% over the next few years. On the Nasdaq, 1,781 issues rose and 807 fell.The S&P 500 index showed 27 new 52-week highs and one new low, while the Nasdaq recorded 94 new highs and 12 new lows.
She said that barring an “unusually severe and persistent” recession, its policy tools were sufficient and rates did not need to go negative, as even at the lower bound for interest rates asset purchases and forward guidance could push long-term rates even lower on average than when nominal rates fell below zero.
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“The dollar’s reaction was nearly instantaneous – it rallied pretty quickly off her hawkish comments”, said Minh Trang, senior FX trader at Silicon Valley Bank in Santa Clara, California.
