The US NFIB small-business confidence index edged higher to 105.9 for February from 105.8 previously while there was a stronger than expected reading for producer prices with a 0.6% monthly gain.
In her prepared comments to the Senate Banking Committee, Fed Chair Yellen reiterated that it was dangerous to wait too long before raising interest rates given the risk that disruptive interest rates could then be required which could push the economy into recession.
According to Yellen, the FOMC expects the labour market to strengthen further with inflation rising gradually towards 2%.
Overall, she expected further gradual interest rates to be warranted and that the committee will evaluate whether further adjustment of the Fed Funds rate is needed at forthcoming meetings.
The comments were seen as relatively hawkish with no move to rule out a March hike with Yellen stating that all meetings are live.
Futures markets moved to price in around a 35% chance of three rate hikes for 2017 from just below 30% ahead of the testimony.
The dollar gained ground with the Euro dipping to five-week lows in the 1.0570 area and the US currency held firm on Wednesday.
US Dollar Surging on a strong US economy together with further geopolitical tensions in the past week, USD is at its strongest versus EUR this year and came within a whisker of breaking through 1.06 in yesterday’s trading. Against the Japanese Yen USD was 154.55 which caused Japanese Finance Minister Shunichi Suzuki to break cover […]
France Quite simply the numbers do not add up for President Macron and his future in government, never mind La Belle France and its citizens : France is the third most indebted EU country after Greece and Italy with a debt to GDP ratio of 110.6%. In the past year the deficit has increased by […]
EUR European Central Bank President Madame Lagarde made two bold statements last week: the ECB does not target exchange rates and the ECB is not dependent on Federal Reserve policy. While at one level both are sometimes true, it is brave to explicitly make those statements at a ECB press conference and more than risks […]