Treasury Secretary Janet Yellen sent markets into a tizzy on Tuesday when she said interest rates may have to rise to keep the economy from overheating with all the government stimulus. But later in the day, she walked those comments back, claiming inflation isn’t going to be a problem and insisting that she wasn’t suggesting or predicting rate hikes.
Yellen’s flipflop is telling. Even if inflation is an issue (and it is), there isn’t a darn thing the Federal Reserve can do about it.
Yellen made her first comments during an event hosted by
The Atlantic magazine. She warned that all of the government spending coming down the pike could cause the economy to “overheat.” That’s code for “it could cause price inflation to surge.”
Asian markets mixed after earnings boost Wall Street MarketWatch 3 hrs ago
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Asian shares were mixed Tuesday after strong corporate earnings and economic data lifted stocks on Wall Street.
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Hong Kong and Sydney advanced while Seoul declined. Tokyo and Shanghai were closed for holidays.
On Monday, a strong dose of positive earnings reports and economic data that showed the U.S. economy is growing pushed the S&P 500 up 0.3%. U.S. futures were lower on Tuesday.
Hong Kong’s Hang Seng rose 0.3% and Australia’s S&P/ASX 200 gained 0.4%. In Seoul, the Kospi lost 0.2% . Shares slipped in Jakarta Taiwan Singapore and Malaysia
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ASIA:
A report published by group of analysts says that the “peak” of China’s economic growth has already passed or will soon do so and momentum will only “wane” further for the remainder of the year, after slowing domestic and overseas demand led to lower-than-expected sentiment in the manufacturing and non-manufacturing sectors in April. The official manufacturing PMI – a survey of sentiment among factory owners – fell to 51.1 in April from 51.9 in March, the National Bureau of Statistics (NBS) announced on Friday. The result was below expected. The official non-manufacturing PMI – which measures morale in the services and construction sectors – fell to 54.9 in April from 56.3 in March. The reading was also below expected.
CAC 40 Edges Higher On Recovery Hopes
BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - French stocks edged higher on Tuesday after Federal Reserve Chairman Jerome Powell said that U.S. economic outlook has clearly brightened amid faster vaccination rates and fiscal stimulus, but cautioned that the economy is not out of the woods yet. While the recovery is gathering strength, it has been slower for those in lower-paid jobs, Powell said at a National Community Reinvestment Coalition event on Monday.
Separately, New York Fed President John Williams noted that current conditions are not nearly enough for a shift in the monetary policy stance.