Fed Chair Janet Yellen has reiterated her view that the central bank should “proceed cautiously” before hiking interest rates.

Echoing comments made in the statement accompanying the Fed’s last rate decision two weeks ago, Yellen said that while headwinds faced by the global economy were not expected to seriously impact upon the US, it was sensible to exercise caution.

She said that global developments and risks had made it necessary for the voting members of the Federal Open Markets Committee to project a slower pace of interest rate hikes.

“This speech was aimed at managing expectations and appeasing the markets,” said a senior economist at Tokyo-based investment manager, Mizuho Financial Global.

Ms. Yellen’s comments contrasted strongly with those made by other Fed officials in recent days. St. Louis Fed chairman, James Bullard and Philadelphia Fed Chairman, Patrick Harker and have aired their support for rate hikes while John Williams, Chairman at the San Francisco Federal Reserve has said the US economy is doing “quite well”.

“We’re not sure which US economy Mr. Williams is talking about but the data suggests that the one everyone else is looking at is flirting with a marked slowdown at best and, at worst, a recession,” added Mizuho Financial Global’s economist.

Yellen’s remarks pushed the S&P500 and the NASDQ higher by 0.8% and 1.5% respectively but the DJIA only rose 0.1%. Gold rose sharply to close 1.5% higher on the day after Ms Yellen defended the use of unconventional tools like quantitative easing (QE) which she said could be redeployed if the US economy were to suffer a downturn.

About Mizuho Financial Global:
Mizuho Financial Global is an independent, full-service brokerage, wealth management and business management concern dedicated to providing pioneering capital appreciation and wealth preservation solutions to affluent individuals and families and businesses.

Without exception, they place the welfare of their clients first and foremost and they take great pride in knowing that they are the first port of call for their investment and financial affairs. They constantly exceed our clients’ expectations by going the extra mile to deliver the service and, most importantly, the returns on investment their patronage demands.

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