The questions aimed at Yellen focussed more on financial industry regulation than the timing of an interest rate hike.
The Federal Reserve is on track to raise interest rates this year despite increasing overseas risks, the chair of the Federal Reserve said in a statement.
Prices were pressured by upbeat USA economic data and comments from Federal Reserve Chairwoman Janet Yellen, which indicated a likely interest-rate increase later this year.
Yellen was flagging the possibility of higher rates so as not to surprise investors when the Fed does eventually lift them, said Quincy Krosby, a market strategist for Prudential Financial. Yellen has said she was withholding some documents upon the advice of the Fed inspector general that turning the material over could jeopardize an on-going investigation. Waiting too long, on the other hand, might force the Fed to tighten at a faster pace to keep the economy from overheating.
They urged her to consider supporting changes in how the Fed operates, such as adopting a rule that would link rate hikes to changes in economic growth and inflation.
“The Fed’s clamor for independence is its underpinning for circumventing any sort of congressional accountability”, Representative Sean Duffy, Republican of Wisconsin, said at a Tuesday hearing on Fed transparency.
The euro, already beaten down overnight against the dollar after Yellen, showed limited reaction to the Greek vote outcome which did not surprise many in the market. “Impending rate hikes, reiterated by Yellen lately in the midst of the global deflationary environment, noting yesterday’s disappointing retail sales, appears to be a primary pressure factor on gold”, said Mike McGlone, director of research for ETF Securities in New York.
The Fed is likely to make its first move in September, according to 76 percent of 51 economists surveyed by Bloomberg from July 2 to July 8. That has translated to historically low borrowing rates for consumers and businesses. Benchmark United States 10-year Treasuries yields edged up 1 basis point at 2.412 per cent.
Still, household spending has disappointed as consumers have used their energy windfall to pay down debt and put more money in the bank. The FTSE 100 rose 37 points, or 0.6%, to 6,790, while eurozone stock markets made bigger gains.
Yellen has said the Fed had declined to send the information because a separate Justice Department probe is ongoing.
‘We’re now looking at 72 USA cents by the end of the year and 70 USA cents by March and June of next year, ‘ he said. Lawmakers in both the House and Senate have introduced legislation to rein in the Fed’s independence.