Yellen sounded hawkish, Beige Book points to solid fundamentals – UOB
Researchers at UOB Group assessed yesterday’s testimony by Chair J.Yellen and the release of the Fed’s Beige Book.
“In what may be one of her last public appearances before leaving the Fed chair early next year, Janet Yellen said on Wednesday a strengthening US economy will warrant continued interest rate increases. She made the remarks before US congressional leaders”.
“The US economy improved slightly in October through mid-November whilst inflation pressures have strengthened, says the latest Fed Beige Book. Economic activity continued to increase at a “modest to moderate pace,” according to anecdotal reports from contacts across the 12 Fed districts, with a “slight improvement in the outlook among contacts... Pre-holiday reports of consumer spending on retail and autos were mixed but largely flat; still, the outlook for holiday sales was generally optimistic”. Tentative signs of an increase in pricing pressures may strengthen the conviction of the Fed officials who have become increasingly anxious about weakening inflation”.