All eyes and ears were focused on Fed Chair Janet Yellen’s sometimes contentious testimony before the Senate Banking Committee this morning (she wasn’t letting anyone put words in her mouth), as market participants were trying to determine just when the Fed will begin to raise interest rates. Well, the Fed Chair left herself plenty of wiggle room, which is not unexpected, as her own words indicate. “It continues to be the FOMC’s assessment that even after employment and inflation are near levels consistent with our dual mandate, economic conditions may, for some time, warrant keeping the federal funds rate below levels the Committee views as normal in the longer run.” In other words, the Fed might begin to raise rates very gradually this year (a token amount in our opinion at most), or they might not.
Anyway, stocks had already had an upward bias in early morning trading, and Ms. Yellen’s testimony helped propel the market averages even higher. By the close, the Dow Jones Industrial Average was up 92 points to finish the day at 18,209. The S&P 500 was up 5 points to close at 2115. Gold was down a fraction to trade at $1200 per ounce, while oil was down $.38 to trade at $49.07 per barrel WTI.
The Yellen testimony tour continues tomorrow in front of the House Financial Services Committee. We really don’t expect the Fed Chair to change her basic message, but maybe some of those “characters” in the House can spark some lively banter. We’ll keep an eye on it for you.
Have a nice evening everyone.