Fed’s Yellen says debt and equity valuations still in line
July 17, 2014 9:27 am
Responding to concerns that asset valuations are becoming disjointed, Federal Reserve Chair Janet Yellen has stated that they are still within the range of historical norms.
Yellen, however, did admit that some of the prices of bonds and stocks were on the “high side”, but also claimed that markets are not faced with “alarming warning signals” as of now. The statement came as the Fed chair provided testimony in front of US lawmakers today where she said that ensuring the stability of financial services is one of the central bank’s unwritten mandates. While there are some stretched valuations, Yellen allayed concerns and claimed that “threats to financial stability are at a moderate level and not a very high level.”
Under the Federal Reserve Act, the central bank’s chief role is to ensure full employment and price stability, goals which have seen improvements in the past several months.
The top official reiterated the bank’s belief that the US economy will continue to rebound strongly across all sectors which are translating in gains in job creation. According to a report they released earlier today, moderate growth was present in all twelve districts of the reserve bank with better consumer spending and more activity in manufacturing. She claimed that, “We have sufficient growth to support continued improvement in the labor market.”
Analysts believe that Yellen’s confidence in the world’s largest economy may lead to an earlier than expected tightening of policy. BNP Paribas SA’s economist Laura Rosner says that the Fed’s data dependence could point towards a different policy from their original intent.
The material has been provided by InstaForex Company – www.instaforex.com
Responding to concerns that asset valuations are becoming disjointed, Federal Reserve Chair Janet Yellen has stated that they are still within the range of historical norms.
Yellen, however, did admit that some of the prices of bonds and stocks were on the “high side”, but also claimed that markets are not faced with “alarming warning signals” as of now. The statement came as the Fed chair provided testimony in front of US lawmakers today where she said that ensuring the stability of financial services is one of the central bank’s unwritten mandates. While there are some stretched valuations, Yellen allayed concerns and claimed that “threats to financial stability are at a moderate level and not a very high level.”
Under the Federal Reserve Act, the central bank’s chief role is to ensure full employment and price stability, goals which have seen improvements in the past several months.
The top official reiterated the bank’s belief that the US economy will continue to rebound strongly across all sectors which are translating in gains in job creation. According to a report they released earlier today, moderate growth was present in all twelve districts of the reserve bank with better consumer spending and more activity in manufacturing. She claimed that, “We have sufficient growth to support continued improvement in the labor market.”
Analysts believe that Yellen’s confidence in the world’s largest economy may lead to an earlier than expected tightening of policy. BNP Paribas SA’s economist Laura Rosner says that the Fed’s data dependence could point towards a different policy from their original intent.
The material has been provided by InstaForex Company – www.instaforex.com
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