With world markets begging for moar, Janet Yellen's prepared Humphrey-Hawkisn Testimony was a disappointment:
- *YELLEN: FED EXPECTS ECONOMY TO WARRANT ONLY GRADUAL RATE RISES (everything is fine)
- *YELLEN: JOB, WAGE GAINS SHOULD SUPPORT INCOMES AND SPENDING (everything is awesome)
- *FED REPORT: LEVERAGE RISKS IN FINANCIAL SECTOR `REMAIN LOW' (so don't worry about banks)
- *YELLEN: FINANCIAL STRAINS COULD WEIGH ON OUTLOOK IF PERSISTENT (so, there's chance)
The bottom line this is simply a rerhash of the Jan FOMC Statement and does not offer enouigh dovishness for the market.
As we detailed last night,
The dovish surprise is if she explicitly removes March from the hiking calendar (which would be Draghi-esque in front running the FOMC), broadly hints at a delay or expresses concern on downside risk to long term inflation or structural stagnation. The intention would be to show US households, business and investors that the Fed has their back.
This is not what she gave, and markets are disappointed.
Full statemenmt:
via Zero Hedge http://ift.tt/1LgOzti Tyler Durden