Wall Street will also digest the October reading on ISM’s non-manufacturing index, which tracks growth in the services component of the US economy. Dudley said later on Wednesday that he would “completely agree” with Yellen.
Advertisement
Appropriate action At its October meeting, the Federal Open Market Committee indicated it “could be appropriate to adjust rates in our next meeting”, she told the house financial services committee.
“With gold unable to find any substantial bounce after consecutive days of decline to multi-week lows, Yellen’s overnight remarks that December remains a “live possibility” for higher rates were enough to push gold lower to the big figure support at $1,100″, said Commerzbank. Goto added that a number above 165,000-170,00 along with a tick up in wages would prompt the Fed to start hiking rates in December. The Nasdaq composite, which is up 8.6% this year, is trading 0.2% higher. Brent crude, which is used to price global oils, fell $1.96, or 4 percent, to $48.58 a barrel.
Ms Yellen also faced hostile questioning on bank regulation from Republican lawmakers, who accused the central bank of lacking transparency.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.5 percent, led by 1.2 percent fall in Australian shares.
Investors use the ADP report to get a sense of the U.S.jobs environment ahead of the closely watched official jobs report expected Friday.
The chairman of the US Federal Reserve has paved the way for an interest rate rise next month, saying policymakers were poised to tighten policy if data continued to show U.S. growth remained solid.
The Dow Jones Industrial Average extended losses after Yellen began her testimony, falling as much as 80 points, before partly recovering later in the day.
“The divide in the committee was essentially over whether they should move in advance of inflationary pressure or wait to see it”, he said.
“If employment numbers come in roughly close to expectations, the odds of a Fed rate hike will increase dramatically”, said Mark Heppenstall, a portfolio manager at Penn Mutual Asset Management. “And the committee’s expectation is that will be a very gradual path”.
In addition to the recent disappointing job gains, the economy grew just 1.5% at an annual rate in the third quarter. The Fed only has one last meeting in December before the year ends.
In response to a question from Minnesota Republican Tom Emmer, Yellen said she wouldn’t rule out using negative interest rates to help stimulate the economy in the event that another serious downturn occurs before the central bank can lift rates away from zero.
Advertisement
CHINA RALLY: Chinese stocks enjoyed strong gains in a sign that state intervention has quelled investor fears about the stock market after a dramatic wipe-out of gains over the summer. She added, however, “No decision at all has been made on that”.
