In echoing her earlier comments about financial markets, Federal Reserve Chair Janet Yellen continued to highlight the potential for excessive risk-taking should rates remain on hold. Her testimony, published before the Q&A with members of Congress, underscored the momentum of the US economy. According to Yellen, GDP growth is expanding at a moderate pace while the labor market has some scope for further improvements. Nevertheless, she underscored the risks of holding rates too low for too long, especially considering she things rate hikes may be appropriate “relatively soon.” Her subsequent comments to lawmakers rarely referred to more dovish leanings of the Central Banker, suggesting that the path for raising rates in December was relatively clear as markets continue to speculate action to be forthcoming. The result was a new multi-year high in the US dollar, with USDCHF reaching the highest point since February.
Yellen Testimony Proves Less Dovish
Daily Analysis - 18/11/2016