She said the Federal Open Market Committee continued to anticipate gradual increases in the federal funds rate over time to achieve and sustain employment and inflation in line with the Fed’s objectives. In Europe, Stoxx 50 +0.8%, FTSE +0.3%, CAC +0.8%, DAX +0.6%. The dollar, however, then rose as traders re-assessed her words and took into account hawkish remarks from Fed Vice Chair Stanley Fischer.
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Dow Jones closed up by 0.28 percent, S&P 500 ended down by 0.14 percent, Nasdaq finished the day up by 0.14 percent. One would therefore not rule out GBP/USD testing the $1.33-$1.335 range over the bank holiday weekend.
Fed chair Janet Yellen said the case for United States rate hikes had strengthened and vice-chair Stanley Fischer hinted at more than one rate hike this year.
The dollar added 0.2 percent to 102.03 yen after earlier rising as high as 102.14, its best since August 12.
U.S. stocks closed mixed on Friday, 26 August 2016 after Federal Reserve Chairwoman Janet Yellen signaled the possibility of an interest-rate increase later this year. [.N] Investors in riskier assets are wary of Yellen hinting at a near-term interest rate hike, which could divert some of the massive liquidity that has underpinned global markets.
Diane Swonk of DS Economics suggested that one reason US stock averages set highs so soon after Britain’s June vote to leave the European Union escalated global economic fears is a belief that the Fed will leave rates alone until perhaps year’s end. Oil prices fell about 1 percent in Asian trade after the Iraqi government said it may consider shipping crude through Iran should talks with the local Kurdish administration on an oil revenue-sharing agreement fall apart. That said, Yellen remain optimistic that in Q3, more jobs will be created, and the economy will grow at a moderate phase. USA crude oil slipped 0.2 percent to $47.22 a barrel after rising 56 cents, or 1 percent, on Thursday.
Gold rose $1.30 to $1,325.90 an ounce, silver rose 13 cents to $18.75 an ounce and copper was little changed at $2.08 a pound. While the strong job and housing markets have given it a strong stance to make a decision before the year end, Bidness Etc believes that it will wait some more to be sure of the pace of economic expansion.
Yields initially rose to 1.60 percent on Yellen’s more hawkish tone, before moving in the opposite direction and dropping as low as 1.53 percent.
The Federal Reserve could start raising interest rates as early as next month but observers say any increase probably won’t happen until December. It was on track to finish the week down 1.5 percent after two straight weeks higher. Japan’s Nikkei .n225 extended losses to close down 1.2 percent, bringing declines for the week to 1.1 percent.
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Among stocks making moves on Friday, Herbalife fell $1.43, or 2.3 percent, to $60.50 after news reports that that Carl Icahn, the company’s biggest shareholder and defender, has been trying to unload his stake in the embattled company. Brent crude, used to price oil internationally, fell 8 cents to $49.59 a barrel.
