on July 16, the fed chairman, Janet Yellen (Janet Yellen) on Tuesday to the U.S. senate banking committee provides testimony, she said in his testimony to the U.S. economic recovery process, but at the same time points out that the performance of the housing market is still disappointing, and pledged to continue to be vigilant about asset bubbles.
overall, yellen revealed her speech to the United States economy is benign and cautious view. Meanwhile, the federal reserve released a report shows that the bank worried about asset price.
the policy report to be released with yellen testimony, said: “valuations reached the high level in some industry sectors, especially in social media and biotech industry in smaller companies, and earlier this year, the company’s share price fallen significantly.”
comments in this report will promote social media company’s share price fell, the consumer review site Yelp’s share price fell by more than 4%, FaceBook, Twitter, share price also fell by more than 1%. Overall, social media and biological technology stocks led the nasdaq composite index, the index fell more than 1% in early trading on the day.
yellen, points out that investors “the pursuit of high yield” investment activities to keep low volatility, while asset prices “are still basically conform to the normal history”. On the question of monetary policy, yellen did not specify the fed will begin to raise interest rates, saying only that is likely to be in 2015. She said in a question-and-answer session in the senate hearings: “on the subject will be in when to raise interest rates for the first time, there is no formula, I can’t give the answer to any mechanical, this will depend on the progress of the U.S. economy, and how we can based on various indicators to evaluate.”
in the process of hearing, several senators put questions to yellen, problems involved in the fed’s monetary policy will stimulate some speculative activity and creating asset bubbles. For this kind of problem, yellen gives a negative response, pointed out that the fed’s policy does not pose a risk, but she also acknowledges that there is this possibility: “when rates start to rise, if the companies and individuals to take adventures, but did not fully prepared, then it is likely that they will bring pressure. For we are in charge of supervision of financial institutions, we will certainly to monitor the interest rate risk management problems.”
yellen says there are signs that the United States in the second quarter production rebounded and spending activities, but “you also need to be closely about this watch. She also points out that the housing market activity is market, the industry sector “almost did not make progress”, “disappointing” since this year the related data, mortgage rates rose slightly.
in yellen provide the testimony at the same time, the federal reserve is planning to end its bond purchases (now the scale of the plan for $35 billion a month), and plan begin to raised benchmark interest rates.
yellen during the hearing also made answer other senate inquiry. Elizabeth Warren, a democratic senator from Massachusetts (Elizabeth Warren), according to the questions whether the large financial institutions still poses a threat to the U.S. economy. Yellen in this example, according to jpmorgan chase has 3391 branches, is equal to the bankruptcy of lehman brothers in 2008 and led to the financial crisis have more than three times the number of branches.
yellen also said the confidence of the U.S. economic recovery process, but warned that the fed’s task is not done. , she notes, “the economy is moving in the federal reserve to realize double destinations of maximum employment and price stability to progress”, but the fed can’t feel too optimistic for the economic recovery, indicating that she was still mad about the question of whether the U.S. economy has to do independent operating with fear. She said: “we need to carefully to ensure that the U.S. economy is steady recovery, then can begin to consider raising interest rates.”
although GDP tumbled 2.9% in the first quarter, but still insists that the yellen, causing the quarterly GDP damage factor is temporary, is unlikely to appear again. (snow)
source: tencent technology