Shares claim 14-month high after Yellen's rates backflip
Australian shares rallied to their highest level in 14 months and narrowed the gap with 2020’s record high to just 50 points in a solid session that charted the market’s relief at US Treasury Secretary Janet Yellen walking back of comments she made alluding to the normalisation of interest rates.
After saying it might be necessary to raise rates to stop the economy from overheating, the former Federal Reserve chair issued a clarification that if anyone respected the independence of the US central bank it was her.
Her benign statement that “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,” was later followed with the response: “It’s not something I’m predicting, or recommending”.
The Treasury Secretary’s first comments were predicted on an awareness of inflation risk, and how that is stoked by the Biden administration’s historic budget spending. A sell-off in Wall Street technology stocks intensified in response to the remarks, sending the Nasdaq down 1.9 per cent to 13,633 and pushing the S & P 500 0.7 per cent …
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