US Fed expects to begin shrinking balance sheet this year

Flags fly over the Federal Reserve Headquarters on a windy day in Washington U.S

This afternoon Federal Reserve Chairwoman Janet Yellen is set to give a testimony to congress. Yellen did not directly answer a question about whether she was open to serving another four years should she be re-nominated by Trump. Dollar/yen breached the 113 handle immediately following the release, but managed to recover slightly as the Fed Chair started her testimony and was last trading at 113.17.

Yellen is due to testify before the House Financial Services Committee on Wednesday and before the Senate Banking Committee on Thursday.

Yellen replied: "It may well be". Indeed, Yellen says in her testimony, "because we also anticipate that the factors that are now holding down the neutral rate will diminish somewhat over time, additional gradual rate hikes are likely to be appropriate over the next few years". Forex market sentiment was hit by hawkish remarks from a Fed official who advocated a rate hike this year.

And to keep more hopes alive for lower rates rather than higher ones, at least by historical standards, Yellen said that the longer-run neutral fed funds level most likely will remain under levels of the prior decades.

Inflation has been running well below the Fed's 2% target in recent months, leading some analysts to argue that the policymakers should hold off on hiking rates or otherwise withdrawing monetary support for the economy.

Just a day earlier came comments from Fed Governor Lael Brainard saying that a low-neutral rate over the medium term means that the Fed wouldn't have much more additional work to do on moving toward a neutral stance. But she said those factors would drop of the inflation calculation.

Wimbledon 2017 women's round-up: Heather Watson powers past 18th seed Anastasija Sevastova
She has reached the third round of Wimbledon twice before, losing to Serena Williams in a three-set thriller in 2015. I had to expect that she would raise her level after the first set and I just had to remain calm and adjust my game.

The Federal Reserve said Friday it sees hopeful signs that business investment is poised to rebound from the doldrums of the global financial crisis and boost the U.S. economy. Given her term as chair expires February 3, several lawmakers were also curious about whether she'd be interested in another four years.

That "has to be an important piece to understand what has happened", she said.

Trump Jr. released emails showing he agreed to meet with someone he believed to be a "Russian government attorney" last summer after receiving an email offering him "very high level and sensitive information" that would "incriminate" Democratic presidential nominee Hillary Clinton.

Several Democrats, perhaps as a way of saying farewell in case she's not reappointed, heaped praise on Yellen's stewardship of the economy.

Jobs are looking great and growth is mediocre. She said job gains were above the bank's estimate and that the economy picked up in the second quarter on a rebound in household spending and stronger overseas demand helping U.S. manufacturers.

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