Yellen Gives First Public Appearance Following April FOMC Minutes
- Fed Chair Janet Yellen answered questions at Harvard’s Radcliffe Day Event
- Chairwoman Yellen reiterated Fed’s stance on 2% inflation target and employment
- Janet Yellen affirmed that a rate hike in coming months may be appropriate
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After the market moving release of last week’s FOMC minutes, the market seemed more confident that that the Fed’s stance on rate hikes was not “if “but rather “when”. In her first public appearance since the release of the minutes, Fed Chairwoman Janet Yellen spoke briefly about monetary policy, however it was not the main subject of the Q&A. Yellen discussed past monetary policy and the Fed’s role going into and coming out of the Great Financial Crisis that crested in 2008.
The Chair’s comments on the heavily discussed rate hike rehashed much of the rhetoric she and her colleagues have used regularly over the past months. Yellen reaffirmed the Fed’s commitment to a 2 percent inflation target, as well as the timeline for official’s expectations. With regards to economic growth Yellen repeated that growth had picked up in recent months according to data she monitors. However, she did say that productivity growth was very slow, and that the recent pace was “miserable”.
As June approaches, comments from Fed officials like Janet Yellen are likely to be far more closely scrutinized. Her statement today did not offer much in terms of new information, however when Yellen said she believes a rate hike in coming months was ‘appropriate’, there was noticeable market impact. The 2-year treasury yields rose more than 3.4 percent during Yellen’s Q&A, the move was also complimented by a noticeable spike in the USDollar Index. The next Fed meeting will be held on June 15, which many officials have noted as ‘live’ – meaning a rate hike is a viable scenario if data supports it.