Federal Reserve board chair Janet Yellen, in a highly anticipated speech Friday at the central bank's annual Jackson Hole summit, explained the general direction at which the U.S economy is heading. The Fed Chair was optimistic regarding the economy, concluding that interest rate hikes are very likely.
This week has been busy in economic reports. First the jobless claims report painted an optimistic picture once again. The jobless claims have fallen for three consecutive weeks, and for much of the summer they have hovered near the lowest level in four decades. In addition U.S. Factory Data showed that U.S. manufactured capital goods rose for a second straight month in July as demand for machinery and a range of other products picked up.
Yellen commented about The Federal Open Market Committee, saying that it "continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives… Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months."
After Yellen’s speech the Dow Jones index surged about 100 points, and the NASDAQ is up about 30 points.