Stocks Lift as Yellen Takes a Dovish Tone
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The market got it first taste of new Fed Chair Janet Yellen today, and so far it likes what it sees. While Ms. Yellen indicated that the Fed will likely continue to reduce the pace of asset purchases in measured steps, her tone at today Congressional was dovish and she underscored QE wasn't on a 'pre-set course' and remains contingent on its outlook for the labor market and inflation.
With 45 minutes until the close, the Dow is up 219 points, the S&P 500 is up 23 and the Nasdaq is up 48.
In her testimony, Yellen praised the impact of QE, saying it succeeded in pushing longer-term interest rates down, promoting a pick-up in housing activity. She noted the U.S. has seen a meaningful increase in housing prices, which she attributes in part to the program. Low rates have also stimulated spending on autos, she said. QE has also helped unemployment decline.
Elaborating further on employment, she said monetary policy is "not a panacea" and noted stagnate wage growth for low and middle income workers. She is 'very concerned' about rising inequality. Yellen said the focus should not be just on the employment rate and they need to consider wider measures on the labor market.
Yellen said she strongly supports the Federal Reserve's dual mandate of maximum employment and price stability.
Commenting on asset prices, Yellen said broadly speaking they are not in bubble territory.
With 45 minutes until the close, the Dow is up 219 points, the S&P 500 is up 23 and the Nasdaq is up 48.
In her testimony, Yellen praised the impact of QE, saying it succeeded in pushing longer-term interest rates down, promoting a pick-up in housing activity. She noted the U.S. has seen a meaningful increase in housing prices, which she attributes in part to the program. Low rates have also stimulated spending on autos, she said. QE has also helped unemployment decline.
Elaborating further on employment, she said monetary policy is "not a panacea" and noted stagnate wage growth for low and middle income workers. She is 'very concerned' about rising inequality. Yellen said the focus should not be just on the employment rate and they need to consider wider measures on the labor market.
Yellen said she strongly supports the Federal Reserve's dual mandate of maximum employment and price stability.
Commenting on asset prices, Yellen said broadly speaking they are not in bubble territory.
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