Publicado: Jue, Agosto 31, 2017
Negocios | By Lorenzo Cobo

Yellen: There's Still More Work to Do

Yellen: There's Still More Work to Do

In her remarks, Ms Yellen said stress-testing had caused banks to increase their capital cushions and improve risk management while asset quality had risen and reliance on short-term wholesale funding was down by half.

Interest-rate sensitive sectors such as telecommunications, up 0.8 per cent, and utilities, up 0.3 per cent, rose as Yellen's speech did not comment on the path of interest rate hikes for the central bank, which sent US Treasury yields lower.

Elsewhere, GBP/USD edged up 0.22% to 1.2907, although investors remained cautious as a third round of Article 50 negotiations between the UK and European Union was set to begin in Brussels later Monday.

Yellen reviewed the wreckage caused by the 2008 financial crisis, including the loss of nearly 9 million jobs, and warned of the consequences of forgetting the damage done to the U.S. and global economies. While the move from 1.18 to 1.19 or even 1.20 matters to traders, from the ECB's point of view it is quite irrelevant where the exchange rate will stand in the next week or two.

At 10:49 a.m. ET (1449 GMT), the Dow Jones Industrial Average was up 65.6 points, or 0.3 percent, at 21,849 and the S&P 500 was up 8.3 points, or 0.34 percent, at 2,447.27.

"Because of the reforms that strengthened our financial system, and with support from monetary and other policies, credit is available on good terms, and lending has advanced broadly in line with economic activity in recent years, contributing to today's strong economy," Yellen said.

The Fed has sharpened its focus on financial stability since the crisis.

Meanwhile, the lending rules in place that encouraged big banks to make more and more bad loans to uncreditworthy borrowers, and then to offload the risk of those bad loans onto taxpayers - the true cause of the financial crisis and subsequent meltdown - are still in place.

Only in 2017 has the Fed started to prep markets for the unwinding of its holdings, which could add to stock market volatility.

Duke Energy Corp. said Friday that it is abandoning plans to develop a nuclear power plant in South Carolina, in the latest blow to the U.S. nuclear industry. The president wants to unwind the reforms, which could be a factor as he considers who should next lead the central bank. Given that Yellen's time as Fed chair expires in February, her remarks may be tantamount to a resignation. The Federal Reserve is a central bank and any extra regulatory power should be transferred to a federal agency that is not independent of congressional oversight. In December 2010, President Clinton said, "The money is there to get this country out of this mess".

Trump, who praised Yellen after his election for keeping interest rates low, has said he probably won't make the decision about the Fed chair until late in the year.

"There's no new bad news except for the hurricane barrelling down on Texas, so the path of least resistance is flat or higher" for stocks, said Art Hogan, chief market strategist at Wunderlich Securities.

The buck has fallen to around USD1.2875 against the pound sterling Thursday afternoon, from a high of USD1.2792 this morning.

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