Yet the Fed chair also sent a contrasting message in a speech in Philadelphia: So many uncertainties surround the economy that it’s impossible to sketch any timetable for when the Fed might raise interest rates again.
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Monday was the Fed chair’s last chance to offer insight into Fed thinking before a media blackout takes effect ahead of the central bank’s June 14-15 monetary policy meeting. Some of the biggest losses went to home improvement store chain Home Depot, which lost $2.45, or 1.9 percent, to $129.29 and its competitor Lowe’s, which gave up $1.45, or 1.8 percent, to $78.56.
The U.S. labor market report for May is “concerning” and might affect whether the Federal Reserve raises short-term interest rates, Chairwoman Janet Yellen said Monday. Those remarks came before Friday’s Labor Department report showing the economy added just 38,000 net new jobs last month.
Oil prices rose over 1 percent on Monday on a weak dollar and as attacks on oil infrastructure in Nigeria capped some output.
The Fed raised its benchmark interest rate in December to 0.5 percent for the first time in nine years.
“I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run”, Yellen said, according to the prepared remarks for a speech Philadelphia. The S&P 500 .SPX closed up 10.28 points, or 0.49 percent, at 2,109.41 and the Nasdaq Composite .IXIC added 26.20 points, or 0.53 percent, to 4,968.71.
“She is trying to de-emphasize Friday’s report somewhat and focus on the macro view that the economy remains on track, and her opinion that rates hikes will be gradual but will continue”, said Charles Comiskey, head of Treasury trading in NY at Bank of Nova Scotia, a primary dealer.
Federal Reserve Chair Janet Yellen went out of her way Monday to stress that the US economy appears fundamentally solid.
“The US employment report was a shocker, with non-farm payrolls of 38k for May significantly undershooting market expectations and downward revisions to previous months”, Bank of New Zealand currency strategist Jason Wong said in a note.
The Dow Jones was up 122.31 points, to 17,929.31, in the mid-afternoon. USA stock prices were about flat compared to their levels just before the speech.
“I don’t personally see a lot of cost to being patient to the July meeting at least”, Lockhart, who does not have a vote this year on monetary policy, told Bloomberg Television.
“I’m sorry – I have got nothing for you on that”, Yellen said to laughter from the audience.
Benchmark US crude oil rose 1.07 US dollars, or 2.2%, to 49.69 dollars a barrel in NY.
The price of oil has rebounded over the last few months, but it is far lower than it was two years ago.
Wal-Mart’s shares were up 1 percent at $71.58 premarket after Jefferies upgraded the stock to “buy”.
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-Holdings in gold-backed exchange-traded funds rose 6.2 metric tons to 1,858.2 tons as of Friday, the highest since November 2013, data compiled by Bloomberg show. Japan’s Nikkei 225 fell almost 0.4% and Hong Kong’s Hang Seng added 0.4%.
