Stocks rise on Yellen

Other Democrats asked about the lack of diversity at the Fed and what the bank could do about the still disproportionately high rates of unemployment for African Americans and Native Americans.

Any rate increases would trickle down to the cost of borrowing for a home or an automobile, although those rates are likely to remain far below historic highs. “Certainly March is not off the table”, said Mr. Clouston, who noted Ms. Yellen’s concern about not getting caught behind the curve and having to raise rates too quickly later.

Analysts warned that if wage increases continue to lag behind price rises, United States consumers will have little option but to cut back on their spending.

Despite much money printing by the United States central bank inflation has only recently started to rise; how much it does, and how quickly, is a big factor influencing when the Fed will put up interest rates.

The Federal Reserve raised interest rates by 0.25% in December, only the second time it has done so since they were cut to near-zero during the 2008 financial crisis.

In 2013, when then-Fed Chairman Ben Bernanke’s signaled the Fed planned to soon reduce it asset purchases, 10-year Treasury yields spiked in an episode known as “the tapered tantrum”. That said, the Fed began 2016 predicting four rate hikes and ended up doing only one. Fed officials have said they don’t plan to sell them for fear of abruptly pushing up long-term rates.

Federal Reserve Chair Janet Yellen testifies before the House Finance Committee in the Rayburn House Office Building November 4, 2015 in Washington, DC.

Yellen told the panel that the Fed is close to achieving the two goals it has been given by Congress – promoting maximum employment and stable inflation.

America’s Dow Jones index continued to scale fresh heights above the 20,000- point mark as analysts pointed to a raft of upbeat economic data ranging from consumer spending to manufacturing, which could receive a further boost from president Trump’s mooted tax reforms. “I think that’s the biggest headline that everyone reacted to”.

However, Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note that confidence was rising and dealers were putting “faith in Donald Trump’s ability to deliver and implement his transformative policies for the U.S. economy”.

At the same time, she suggested some rules roll back.

“You’ve had a major shift in the leadership of this country“, Barr said in a brief interview Wednesday.