Fed Rate Increases Further In Summer

Yellen worries that if the economy suffers a negative impact, the Fed does not have room to cut interest rates.

She analyzed that if the interest rate increase triggered the economic downturn, the space to deal with is limited, so if the economy continues to warm up and the job market continues to improve, the gradual increase of interest rates by the Federal Reserve is appropriate, but we must guard against increasing interest rates too quickly.

She also said that if the economy suffered a negative impact, it would probably resort to forward-looking guidance and debt purchase.

At present, negative interest rate measures are not considered.

The US dollar rose to a higher level against the yen; COMEX 6 futures fell below the 1210 US dollar / ounce mark, refreshing its lows to 1209.50 US dollars / ounce since April 1st; the US stock market narrowed and the US bond prices widened; the WTI 7 crude oil futures fell short to 49.13 U.S. dollars / barrel in the short term.

On the eve of Yellen's speech, spot gold shock weakened, and once fell to a low of eight weeks to 1211.58 U.S. dollars / ounce, the U.S. economic data for the better, the Fed's interest rate hike is expected to continue to suppress significantly, the first quarter of the United States in the first quarter of GDP repair, but also limited the rebound in gold space.

In May, the US dollar hit its best monthly performance in 16 months.

However,

Any hint of delay in raising interest rates in the speech may reverse the US dollar rally.

On Thursday, fed governor Powell (Jerome Powell) suggested that the US dollar rose to 3.1% in May for the 10 major countries or regions after the US Federal Reserve raised interest rates as soon as possible in June.

Yellen said that from the recent data, the US economic growth is accelerating.

Earlier, inflation did not reach the Fed's goal because oil prices fell and the US dollar strengthened. Weaker US dollar and lower oil prices weakened inflation, while oil prices and the US dollar rally generally stabilized.

Yellen said that the increase in the employment participation rate was exhilarating. The employment market did change from any point of view, but productivity growth was very slow.

Yellen said that the job market is expected to achieve further development, but has not seen a substantial improvement in salary growth. There are many job seekers who work part-time but want to work full-time.

Yellen, chairman of the Federal Reserve, said that the QE and forward-looking guidelines have helped the us recover.

Yellen said he did not see how the property bubble could generate systemic risk, and was trying to improve the ability to detect risks and focus on systemic risks and financial stability.

She said that the quantity and quality of bank capital have been effectively improved.

The emerging market situation that keeps watch or brings another crisis will deal with cross-border financial related issues with European and British regulatory authorities.

In addition, Yellen said that capitalism is the best economic system, but it may collapse, and Tobin inspires the enthusiasm of social justice.

She said she hoped to take all actions to guard against the financial crisis and would do everything possible to avoid it.

The Fed is very good at handling the financial crisis.

Data from the Chicago Mercantile Exchange (CME) show that before the Yellen speech at Harvard University, the Fed's federal funds rate futures trend means that the possibility of FOMC raising interest rates in June rose by 4 percentage points to 34%, and the possibility of raising interest rates in July increased by 4 percentage points to 62%.

"The new debt king" has made comments that Yellen's speech is more dovish than her colleagues, but Yellen said that "raising interest rates in the next few months may be appropriate" does not mean that interest rates will rise in June.

Agency FTN: Yellen's suggestion that the Fed will raise interest rates in the coming months is surprising.

Chris Low, an economist at FTN, said that Yellen, the chairman of the Federal Reserve, believes that it is appropriate for FOMC to raise interest rates in the coming months. This is a surprise to all of us. The market did not think that Yellen would talk about policies in May 27th. Yellen's tone and commentary were very similar to that of New York Fed chairman Dudley, but Yellen's wording was "higher in gold content".

Agency: Yellen's view changed more than market expectations.

Steve Stanley, chief economist of Amherst Pierpont Securities, believes that the degree of change in Yellen's views is greater than the market expectations. A few months ago, Yellen's cautious dovish remarks could be said to have taken all hawks away, but today's statement is consistent with the statements of other Fed officials this month. Yellen's short speech shows that his view of raising interest rates is changing, and the degree of change may be greater than everyone expected. She will not now prompt interest rates in June, but is expected to be ready for press conference in June.