sunshineprofits.com / ARKADIUSZ SIEROŃ / NOVEMBER 30, 2017
Yesterday, Yellen testified before the U.S. Congress. What do her remarks mean for the gold market?
On Wednesday, Janet Yellen, still the Federal Reserve Chair, testified before the Joint Economic Committee. Given that Powell will replace her as Fed chief, it was Yellen’s last testimony before Congress.
Her prepared remarks were upbeat about the economic outlook. Yellen pointed out the labor market gains and noted that the U.S. economy strengthened further this year, as real GDP increased at a 3 percent pace in both the second and third quarters, despite the disruptions to economic activity caused by the recent hurricanes. Moreover, Yellen downplayed risks of financial instability:
“Although asset valuations are high by historical standards, overall vulnerabilities in the financial sector appear moderate, as the banking system is well capitalized and broad measures of leverage and credit growth remain contained.”
However, the most important takeaway from her testimony is the less dovish view on inflation. Last week in the New York, Yellen “came across as giving more credence” to the opinion that low inflation might last longer than expected. A similar signal was sent in the last FOMC minutes. But yesterday, she said:
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