Tags: Yellen | congressional | Fed | stocks

CNBC: Yellen's Congressional Testimony Might Boost Stocks

By    |   Tuesday, 15 July 2014 09:25 AM

Federal Reserve Chair Janet Yellen is unlikely to change her tune much in testimony before the Senate Banking Committee Tuesday.

And that could be enough to help stocks keep rising, experts tell CNBC.

"It seems like the markets love her. Every time she talks, they go up. It almost makes me feel [Monday's] rise was a preemptive Yellen party," Randy Frederick, managing director of active trading and derivatives for Charles Schwab, told the news service.

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But, "if she shows just a miniscule of hawkishness, the market will react negatively."

The S&P 500 gained 9.53 points, or 0.5 percent, to close at 1,977.10 Monday. It stands within 1 percent of its record high.

Yellen has recently expressed the view that the economy is recovering but still requires assistance from the Fed.

"I think she's going to reinforce her message that the economy needs support at this juncture, despite signs of progress," Edward Marrinan, credit strategist at RBS, tells CNBC.

"She's not going to say very much about the exit strategy. I think she's going to use the Jackson Hole symposium to start setting the stage for that," he says, referring to the Fed's Jackson Hole meeting at the end of August.

But others say that in the wake of the strong June jobs report, Yellen might change her tune a bit.

"Since she is testifying on behalf of the full FOMC [Federal Open Market Committee] and not speaking on behalf of herself, there is a risk she is less dovish than what the financial markets assume are her underlying views," Joseph LaVorgna, chief U.S. economist with Deutsche Bank, tells The Wall Street Journal.

"I'm steeling myself for disappointment. Everything points to the Fed starting to exit their extraordinary policy a little earlier, but we might get some push back from the chair. I'm just afraid she's going to delay, delay, delay," Chris Rupkey, chief financial economist at Bank of Tokyo – Mitsubishi, tells CNBC.

"The hallmark of the Bernanke/Yellen Fed is to delay the exit."

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Federal Reserve Chair Janet Yellen is unlikely to change her tune much in testimony before the Senate Banking Committee Tuesday.
Yellen, congressional, Fed, stocks
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2014-25-15
Tuesday, 15 July 2014 09:25 AM
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