Yellen: Don’t read too much in one job report
June 6, 2016, 5:13 pm

Yellen’s remarks weren’t surprising given the volatility in global markets, but investors will be looking for further clues the Fed will raise interest rates again in July [XInhua]

Most analysts ruled out another quarter point interest rate hike in June after last week’s dismal jobs report.

But Yellen called on markets not to overreact.

“Although this recent labor market report was, on balance, concerning, let me emphasize that one should never attach too much significance to any single monthly report,” she said in prepared remarks.

However, most experts held out the possibility that once the repercussions from the UK vote on leaving the EU (BREXIT) are known, the Fed could move to up rates in July or September.

Last week, most members of the Reserve’s Federal Open Market Committee (FOMC) appeared to give little importance to the May job report.

“Most importantly,” Yellen said of the past year’s fiscal developments, “the economy has registered considerable progress over the past several years toward the Federal Reserve’s goals of maximum employment and price stability.”

But she stressed the Fed’s cautious review of market statistics with an eye on how the economy continues to develop in China.

She said that there was an “inevitable uncertainty surrounding the outlook for the economy”.

The Fed is wary of a general shock to the system, such as the upheaval caused last fall by China’s fiscal corrections.

“The uncertainties are sizable, and progress toward our goals and, by implication, the appropriate stance of monetary policy will depend on how these uncertainties evolve,” she said.

US stocks reacted positively to the expected delay in rate hikes with the Nasdaq at press time rising 0.32 per cent to 4,958 and the S&P 500 up 0.23 per cent to 2,104.

The Dow Jones was up 0.37 per cent to 17,873.

The FOMC meets for a general monetary policy conference on June 14-15.

The BRICS Post with inputs from Agencies