Global Markets Drift After Yellen Speech


Global markets drift after Yellen speech

NEW YORK, (UrduPoint / Pakistan Point News -27th Augst,2016) - European and US equities markets were split on Friday after US Fed chief Janet Yellen suggested interest rates could rise in the near-term. In words carefully parsed by market watchers, Yellen said recent months had seen conditions in the US economy increasingly favor an increase in interest rates but she did not give a clear signal of timing. The US Federal Reserve has suffered stinging criticism in recent months for a perceived lack of coherence in its public positions on monetary policy, and markets had eagerly awaited her speech for some policy clarity. But the reaction of traders on both sides of the Atlantic suggested that there remained many questions about the Yellen-led Federal Open Market Committee's path of US monetary policy.

Major US indices were mixed, with the Dow Jones Industrial Average closing down 0.3 percent, the broader S&P 500 losing 0.2 but the tech-heavy Nasdaq rising 0.1 percent. European stocks advanced marginally with London and Frankfurt rising 0.3 percent and Paris gaining 0.8 percent by the close. Noting strong US job growth, Yellen said gradual increases in the Fed's benchmark rate in the coming years should be expected. "In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," Yellen said.