Yellen Talks : Now the Market Jumps!!

When Janet Yellen talks, investors normally listen and like what they hear, and push asset prices higher.

But that wasn’t the case on March 19, when the new Federal Reserve chair spooked markets during a press conference after suggesting that the central bank could start hiking short-term interest rates earlier than expected next year. Whether it was a gaffe or not, Yellen said the Fed could start hiking rates “six months” after the end of its bond-buying program, which raised the specter of rate hikes as early as April 2015, vs. late-2015 as Wall Street expected.
The Dow fell 114 points that day.

Fast-forward to Monday. At a speech in Chicago, Yellen reiterated that the Fed isn’t in a big hurry to take away the so-called “punch bowl.”
The Dow is up more than 110 points today. Forward by Ty Laffoon

Yellen stressed that the job market and economy still need Fed support. She reiterated that the Fed would continue to lend a hand by keeping rates low for a long time, despite fears to the contrary as the Fed dials back on its monthly bond purchases.
Yellen, in her own words:

Forward by Ty Laffoon

“I think this extraordinary commitment is still needed and will be for some time,” she wrote in her prepared speech. ”And I believe that view is widely shared by my fellow policymakers at the Fed.”
“Recent steps by the Fed to reduce the rate of new securities purchases,” she added, ”are not a lessening of this commitment, only a judgment that recent progress in the labor market means our aid for the recovery need not grow as quickly. Earlier this month, the Fed reiterated its overall commitment to maintain extraordinary support for the recovery for some time to come. This commitment is strong.”

Sent by Ty Laffoon