US stocks edged higher but the dollar pulled back from recent gains on Friday after Federal Reserve Chair Janet Yellen signaled an interest rate hike was likely this month if current economic conditions hold.
Yellen told a Chicago business group that lifting benchmark interest rates “would likely be appropriate” if employment and inflation trends stay solid. Yellen’s remarks were the focus in a session that saw stock markets in Asia, Frankfurt and London retreat, reports BSS.
Paris gained 0.6 percent as centrist Emmanuel Macron has emerged as a leading rival that could derail Far-right presidential candidate Marine Le Pen, who has vowed to take France out of the eurozone.
Yellen’s remarks followed similar commentary from other Fed officials this week that left markets betting the US central bank will pull the trigger at the March 14-15 policy meeting.
The speech also came on a day when US data showed the services sector, the main driver of the economy, hit its fastest pace in 15 months in February. For the moment, US investors are taking a sunny view of the Fed’s stance.
“At some point, maybe later in the year or next year, the market may not look at a rate hike as a positive thing,” said Tom Cahill of Ventura Wealth Management.
“But right now, the market is willing to see this as an indication that economic growth is accelerating.”
While US stocks rose, the dollar actually retreated in a move seen as evidence of profit taking after the greenback climbed earlier in the week.
