Live blog and video of Yellen's testimony before House panel

Ross Houston
July 17, 2017

Federal Reserve Chair Janet Yellen's prepared testimony for her semi-annual report to Congress made clear that central bankers are struggling to understand the recent downward trend in inflation.

Fed Governor Lael Brainard said on Tuesday that she would want to assess the inflation process closely before making a determination on further interest rate hikes.

The dollar fell versus most major peers, 10-year Treasury yields slid below 2.32 percent and gold futures rose.

The next Fed meeting is scheduled for the end of the month. But while Yellen was mostly positive, "her forward-looking comments on the economy and rates seemed a bit less emphatic than those from her press briefing last month", noted Jim O'Sullivan, chief USA economist at High Frequency Economics. However, on reflection, the market has considered there will be at least one more hike in the Fed Interest rate in 2017 and 3 in 2018, and for the time being has sold the Dollars.

-Yellen will continue testifying Thursday.

Wall Street rose modestly on Thursday afternoon, helped by gains in financials ahead of profit reports from several big USA banks Friday.

-The due to publish its Repeal Bill on European Union membership this week.

Global equity markets remain mixed - Dow +0.64, S&P 500 +0.74, FTSE +1.19%, DAX +1.52%, CAC +1.59%, Nikkei -0.48%, Shanghai -0.17%. Technology, real estate and materials shares all finished up 1% or more.

The dovish sentiment from the Fed at the same time put the S&P 500 financials, which tend to benefit from higher rates, last among sectors, ending with just a gain of 0.1 percent.

-The Stoxx Europe 600 index added 1.5 percent, led by builders and energy companies.

The producer price index for final demand inched up by 0.1% in June after coming in flat in May.

Delta Air Lines Inc on Thursday reported a 21 percent drop in second-quarter profit because of sharply higher operating costs, despite higher passenger unit revenue, sending its shares down about 1.7 percent.

-The yen gained 0.7 percent to 113.14 per dollar.

The Shanghai Composite slid 0.14 percent and the Shenzhen Composite slid 0.204 percent.

-The loonie rose 1.4 percent to $1.27356. Energy stocks should find buyers, with Brent and U.S. crude moving higher, with a sizeable 7.6 million barrel draw in United States crude inventories.

About 6.1 billion shares changed hands on US exchanges.

U.S. gold futures for August delivery were up $5.10 an ounce at $1,219.80.

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