FED TALK: Yellen’s comments in her semiannual testimony to Congress assuaged concerns among some traders that the Fed has been too hasty in raising interest rates despite stalling inflation and sluggish U.S. economic growth of just 1.4 percent in the first quarter. Many economists believe the Fed, which has raised rates three times since December, will increase rates one more time this year. The comments pushed the Dow up 0.6 percent to 21,532.14, a record high. The average last set a record high on June 19.
THE QUOTE: “While nothing groundbreaking in Chair Yellen’s perfunctory testimony, she unambiguously drew attention to inflation as the critical determinant of Fed rate hikes,” Stephen Innes, a senior trader at OANDA, said in a commentary. “Nothing better for investment sentiment than Dr. Yellen providing an upbeat economic assessment with a tepid inflation outlook.”
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