Federal Reserve Chair Janet Yellen fuels stock market rally

“Stocks were at session highs on Wednesday, July 12, as congressional testimony from Federal Reserve Chair Janet Yellen soothed fears of a central bank moving too fast,” Keris Alison Lahiff reports for TheStreet. “The Dow hit an intraday record on Wednesday, superseding the high set on July 5”

“In prepared testimony before Congress, Yellen reiterated that rate increases would be gradual. Like Fed Gov. Lael Brainard, Yellen does not expect rates will have to rise by too much to reach neutral,” Lahiff reports. “Also in her testimony, Yellen said that the central bank will likely begin unwinding its $4.5 trillion balance sheet this year, while closely monitoring low-inflation trends.”

“On inflation, Yellen said recent weak inflation trends were tied to ‘a few unusual reductions in certain categories of prices’ and that the Fed was ‘carefully monitoring’ incoming data,” Lahiff reports. “No Fed monthly meeting this year has chances greater than 50% of seeing another rate hike from the central bank. The closest, the December meeting, has a 0.25% interest rate increase at a 47.3% likelihood, according to CME Group fed funds futures. ”

Read more in the full article here.

MacDailyNews Take: All eyes will be on Apple on August 1st as the company reveals Q317 earnings and Q417 (holiday quarter) guidance after the closing bell.

SEE ALSO:
Apple to release Q317 earnings, webcast live conference call on August 1st – July 6, 2017

12 Comments

  1. Tail wagging the dog. Janet Yellen is another tool in a long line of incompetent Fed Reserve chairpeople. The Fed R has outlived its usefulness, if there was any to begin with. Markets are way over-bought with false enthusiasm. Can another bubble burst be far away?

  2. The stock market was completely flat for a few years right up until Trump’s election, and then it shot up. Janet Yellen was there over all that time that the market was flat. So did this Democrat try to stall the stock market under Obama and just get it going under Trump? Or was it Trump’s promises to reduce regulation and cut taxes that mattered?

  3. Uh… no. There was this thing called the GFC… and the stock market was NOT flat, it rocketed up in 2009 to gain everything it lost in 2008. Suckers and fools sold at the bottom.

    It took almost a decade to recover from the GFC and in the meantime everything from employment to economic activity stagnated… It’s what Obama inherited… and the resulting rally is what he gifted the current POTUS.

    The markets were looking for a reason to rally and they thought that a pro-business prez was a good catalyst… but one man does not break or make an entire economy. The economy was set to expand and it was firing on all cylinders.

    1. ” …and the resulting rally is what he gifted the current POTUS.”

      The mentality expressed in the above fiction is precisely why the Donald Trump victory in 2020 will be the greatest landslide in US political history.

  4. We’re back to boom and bust economics. We’re in the boom phase. At some point, one market (probably credit / real estate again) will get too greedy and cause a crash.

  5. Oh crap. Now we are screwed. They are running up the interest rate so they can have bit a room to take it back to the zero bound after the bubble bursts again.

    Oh well I guess I can start buying again when the stuffing gets knocked out.

  6. Mdn.. correct me if I’m wrong.. but the guidance Apple provides at next earnings report ( August ) is not the guidance for holiday quarter..
    Holiday quarter is Oct, Nov, Dec , ( Apple 1st fiscal quarter ). with results reported in January .
    The holiday guidance will be provided in Apple’s 4th fiscal quarter earning report ( July, Aug ,Sept ) which be realeased sometimes in October.

    1. Apple generally provides guidance for the quarter that follows the quarter for which apple releases earnings.
      CUPERTINO, California — May 2, 2017 — Apple today announced financial results for its fiscal 2017 second quarter ended April 1, 2017. The Company posted quarterly revenue of $52.9 billion and quarterly earnings per diluted share of $2.10….
      Apple is providing the following guidance for its fiscal 2017 third quarter:
      revenue between $43.5 billion and $45.5 billion
      gross margin between 37.5 percent and 38.5 percent
      operating expenses between $6.6 billion and $6.7 billion

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