Financial markets are highly sensitive to a variety of factors like monetary policy decisions of central banks, macroeconomic statistics, expectations of crucial events, speculations about outcome of events, and even rumors. Verbal interventions of top policymakers have a powerful impact on trading sentiment. No wonder investors are alert to every comment of US Federal Reserve Chair Janet Yellen. Her latest keynote speech at the Fed's annual monetary policy conference in Jackson Hole triggered big market moves. The policymaker sent a clear message to financial markets that the case for a rate increase had grown stronger. In response, the US currency rose sharply against a basket of currencies. Yellen’s comments left the door open for a hike as early as September. Although US government data had shown sluggish economic growth in the second quarter, Janet Yellen noted a healthy labor market and low unemployment rate. She said the Fed already thinks the economy is close to meeting its goals of full employment and stable prices. She described consumer spending as solid, though business investment was weak and exports had been hurt by a strong US dollar.
Analysts think nowadays the US Fed is ready to tighten monetary policy sooner rather than later. The Federal Open Market Committee is to hold three meetings until the end of the year: in September, November, and December. The rate hike could be announced at any meeting. The Russian currency could also benefit from the Fed move.
