Finance experts share the views that long-awaited Janet Yellen’s speech to an annual conference of central bankers did not make a strong impression on market participants. Anyway, Wall Street paused on Friday with little reaction to the Fed chief's speech. An hour later after she had completed her statements, the U.S. main stock indices fell 0.2% with the hi-tech Nasdaq composite adding 0.1%. The currency market responded in a predictable manner.
Here, the EUR/USD pair sank 0.5% with the euro trading at 1.3223 against the greenback. Besides, traders recorded that the USD/JPY hit the level of 104 yen versus the U.S. dollar reaching such a maximum first time since April. The debt market responded to the Fed’s chairperson testimony with notable yields of 2-year bonds and moderate yields of 10-year treasuries. So, why did Yellen’s speech disappoint one and all? “She gave everybody a bone and didn’t commit herself to anything that the market hadn’t already considered," Phil Orlando, chief equity strategist at Federated Investors in New York, commented on Yellen's speech. The formal testimony was made in line with the July Fed minutes. A month ago, she highlighted how much the weak jobs market was related to low demand in contrast to more steady trends in the economy. Her latest speech in Jackson Hole was closely watched for hints on shifts in the Fed monetary policy. Yellen said the U.S. labor market is still bruised from the Great Recession which made it harder to determine when the Fed should lift interest rates that are currently at super-low levels. Thus, the key question was left without an obvious reply. That toned down expectations that the U.S. central bank would act soon to raise interest rates.
