Though the Fed prefers a separate Commerce Department price index, which will be released August 1, Friday's data will give policy makers a window into how momentum is shaping up ahead of their July 25-26 policy meeting. Stay tuned before the open tomorrow for earnings from Citigroup (C), JP Morgan Chase (JPM), and Wells Fargo (WFC).
Yellen repeated the message she has been sending all year that the US economy no longer needs the extraordinary support the central bank began providing in 2008 in the wake of a severe financial crisis and the deepest recession since the 1930s.
Companies in the S&P 500 are expected to report an increase of six per cent in operating earnings per share compared with the year-ago period, according to CFRA Research. It's premature to reach the judgment that we're not on the path to 2 percent inflation over the next couple of years.
In her second straight day of Capitol Hill testimony, she walked back her statement last month that she didn't expect another financial crisis "in our lifetimes".
Yellen said some temporary factors appear to be at work in holding down inflation but the Fed was focused on achieving the target. A neutral interest rate level refers to one that neither encourages nor discourages economic activity. Another somewhat unsettling passage in her remarks had to do with globalization's negative impact on the middle class.
"It is important that we maintain the improvements that have been put in place that mitigate the risk and the potential damage", Yellen said.
A New Orleans float depicts a looming debt crisis in the US, with numerous government's "eggs" about to crack.
"Risk off is what we need for gold to really come to life, when stock markets do fall, which I think is only a matter of time".
-West Texas Intermediate crude climbed 1 percent to settle at $45.49 a barrel.
Crude oil futures continued to rebound Thursday, a day after data confirmed the biggest drop in USA inventories fell the most in ten months.
Japan industrial production for May is due later in the session. It's up 0.5%, after futures on the index traded just slightly higher before the Fed chief's comments. The wild card is whether slow wage growth might be making consumers more cautious about big-ticket items. The underlying gauge rose 0.2 per cent on Thursday.
A Dose of Yellen Eases: Sometimes the appearance of a Fed chair in front of Congress gets people nervous, but that wasn't the case with Yellen's testimony Wednesday, perhaps because it was so well telegraphed. Investors are split on whether the BoE will raise interest rates by the end of the year, following in the footsteps of the U.S. Federal Reserve, which has lifted rates twice this year, and the Bank of Canada, which increased rates on Wednesday.
The market is now pricing in less than a 50% probability of rate hike at the December meeting.
I took a look at a lot of bullish stock market headlines this morning, all after the fact, of course, so the contrarian in me feels that I should be looking at the short side today.
Global bond yields are lower, with US Treasuries in the driving seat for a change.
The major miners are mostly higher with modest gains.
On Wall Street, stocks closed modestly higher on Thursday as traders seemed reluctant to make more significant moves ahead of the release of some key economic data and earnings news on Friday.
President Donald Trump has promised to dismantle Dodd-Frank, which Republicans have said has been too burdensome for banks. Sometimes transports can provide a good reflection on wider economic performance.