Fed Chair Janet Yellen testified before the House Financial Services Committee yesterday. It was the most anticipated news of the week and Janet Yellen did not disappoint, pointing to the higher risks from China’s slowdown. Financial conditions have become less supportive for the US growth, as the recent slide in equity prices and the Dollar’s rise if continued, could weigh on the economic activity and the labour market. Despite these comments Ms Yellen still pointed to the policy of signalling gradual interest rate increases, arguing that the continued wage gains and hiring seen should support the economy, also stating that overseas monetary policies should buoy world growth.
The economic docket was relatively light yesterday, however US politics gave us something to talk about. As expected, Donald Trump and Bernie Sanders triumphed in the New Hampshire primary. Hilary Clinton, who lost by 21%, has promised to “retool” her message. Trump won 35% of the vote, with his closest competitor Ohio Governor John Kasich, receiving only 16%.
Today’s economic docket is relatively quiet. However, we do have a high tier piece of labour data from the world’s biggest economy; the US. The weekly Jobless claims figure is forecast this afternoon to tick slightly higher from its previous to 287k. Fed Chair Janet Yellen is also scheduled to testify on the Semi-annual Monetary policy report before the Senate Banking Committee later this afternoon, rhetoric is expected to be similar to yesterday’s Fed comments.