U.S. Treasury Secretary Janet Yellen hinted that if the Biden administration spending measures to push up inflation, coupled with strong economic growth, the Federal Reserve Board (Fed) may need to raise interest rates, the U.S. stock market yesterday the first heard the news fell hard, Asian stock markets closed today also fell more than up less.
Yellen (Janet Yellen) in the United States and the “Atlantic Monthly” (The Atlantic) pre-recorded interview, said that if the U.S. President Joe Biden (Joe Biden) proposed a total size of more than 4 trillion U.S. dollars of the latest government spending bill to take effect, and the U.S. economy is hot, I’m afraid it will take “slightly” to raise interest rates to moderate inflation.
Yellen’s remarks seem to be out of the united front set up by top U.S. officials. This front was originally intended to reassure investors, so that they believe that the Fed’s super-easy monetary policy will continue to be implemented until the U.S. economy is recovering at a fairly steady pace.
Yellen’s speech came out, disrupting the Wall Street stock market, the three major indices immediately fell hard, led by technology stocks, the Nasdaq index fell, because technology companies are more vulnerable to rising interest rates.
But Yellen later clarified that she was not predicting or implying that the Federal Reserve would raise interest rates. U.S. stocks S&P 500 index closed in response to the decline narrowed, the Dow Jones index turned red and rose slightly to close, but the Nasdaq index was still significantly lower at the end.
Nevertheless, analysts still expect that the Fed’s accommodative monetary policy will be maintained for some time.
Commonwealth Bank of Australia (Commonwealth Bank of Australia) of Mandi (Kim Mundy) pointed out that Yellen did not mention the specific schedule of interest rate hikes, she clarified when also said that the Fed is not recommended to raise interest rates. “We expect the (Federal Reserve) to remain very patient as economic data improves.”
Stocks in Hong Kong, Taipei and Wellington all closed 0.5% lower today, while Singapore stocks also closed 0.8% lower as the local 2019 coronavirus disease (COVID-19) outbreak heated up, and Manila, Bangkok and Kuala Lumpur stocks also closed in the black.
However, stocks in Sydney, Jakarta and Mumbai closed higher today. Stocks in Shanghai, Tokyo and Seoul were closed for the holiday.
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