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    Cautious approach from Yellen

    Yellen’s remarks for the Senate:

    • Cautious approach on rates allows time to assess if economic growth is rebounding and if outlook for labor market, inflation will improve
    • Available indicators point to ’noticeable step-up’ in Q2 GDP. Consumer spending helped by solid income growth
    • Fed to assess whether growth, jobs and inflation will gain
    • China faces significant challenges to rebalancing
    • Pickup in household spending makes her optimistic that jobs market and overall economy will improve over next few months
    • Reiterates that FOMC expects to gradually raise rates
    • Tentative signs of wage growth finally picking up
    • Watching jobs market carefully to see if slowdown transitory
    • Stock market forward P/E ratios well above three-decade median

    Markets reaction is extremely limited, there is nothing new in the speech, Yellen confirms data dependant approach and a possibility of a hike this year. Remarks are consistent with a press conference last week.

    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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