“These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.” With her testimony on Wednesday, Yellen joined Vice Chairman Stanley Fischer and other senior Fed officials in declaring it’s too soon to tell whether sharp drops in stocks, oil prices and some bond yields represent passing volatility or reflect worsening global economic fundamentals that will dampen growth and inflation in the U.S. “The FOMC anticipates that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate,” Yellen said, repeating language from the committee’s January statement almost verbatim.
There will be no major dana releases from the UK tomorrow. In the US session Janet Yellen is due to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington DC. Also, Unemployment Claims figures are scheduled for a release. Analysts are predicting increase to 287,000.
Figures to watch:
Unemployment Claims (Wednesday 14:30)
Fed Chair Yellen Testifies (Thursday 16:00)
