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    Yellen speaks at press conference

    Federal Reserve Chair Janet Yellen comments on today’s decision by the Fed’s policy-setting Federal Open Market Committee to leave rates unchanged during a news conference in Washington. Below we present the key points of her speech:

    • clearly the market expects Fed rates to remain low over the next 10 years
    • cautious approach to monetary policy is apprioprirate (negative for USD),
    • Q1 slowdown in consumer spending appears to be temporary,
    • pace of labor improvement has slowed markedly,
    • important not to overreact to 1-2 weak jobs reports, we will be watching carefully,
    • much of the shortfall in inflation continues to reflect energy and imports,
    • core inflation ’close’ to 1.5%, expects it will rise to 2% over next 2-3 years,
    • median growth expectations slightly lower.

    Yellen with no surprise presents cautious stance. The shifts in the dot-chart were crucial for USD. However, EURUSD has moved a bit lower and the pair is now traded around 1.1255. On the other hand, more cautious FED is good news for equitiy markets. During Q&A session J. Yellen underscored significance of the upcoming British referndum as it has increased uncertinity at global markets. The "Brexit" may impact path of rate hikes in the US.


    Any person acting on this information does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

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