Cantor Fitzgerald CEO Matthews Analyzes Market Reaction to Yellen’s Comments, on CNBC

“The Fed served notice that a rate hike is still a possibility this year, and the markets had gotten a little complacent”, said Anthony Valeri, investment strategist for LPL Financial in San Diego. In addition to the Dow’s 100 point gain, the benchmark S&P 500 rose about 0.5 percent while the NASDAQ Composite posted about a 0.6 percent gain.

US gold futures for December delivery settled up 0.1 percent at $1,325.90.

Yellen, speaking Friday at a conference of central bankers and economists in Jackson Hole, Wyoming, said while the USA economy has strengthened to the point that interest rate hikes are possible, further asset purchases must remain part of the Fed’s toolkit.

To take note of, following her speech her number two at the Fed, vice-chair Stanley Fischer, told CNBC her comments were consistent with a possible September hike and two rate hikes before 2016 was out. Her remarks raised the likelihood that the Fed will increase the rate from its current ultra-low 0.25-0.50 percent level by the end of the year, and as early as its next meeting in September.

Yellen’s speech comes as new data shows the economy was more sluggish that initially thought in the second quarter, with GDP expanding at a 1.1 percent annual rate.

But without a clear timeline, markets “will remain somewhat volatile”, he added.

The Federal Reserve could be close to raising interest rates.

U.S. Treasury yields rose to more than one-month highs on Friday as investors considered whether the Federal Reserve is likely to raise interest rates at its September meeting, after hawkish but noncommittal comments by Fed Chair Janet Yellen. Throughout the past week we heard consistently hawkish comments from USA policymakers who all seem to agree that the country is close to full employment and inflation is on the rise.

Herbalife Ltd. tumbled after hedge fund manager Bill Ackman said that top investor Carl Icahn is trying to sell his stake in the nutrition company.

With an interest rate hike still viewed unlikely in the immediate future, the dollar struggled to gain traction during the day, but ended higher against the euro at $1.1195 and the yen at 101.77 yen.

The broad-based major European markets closed higher in Friday’s trading session, as rising mining stocks and automakers helped push the indices into positive territory.

Other markets:Oil futures (http://www.marketwatch.com/story/oil-prices-retreat-ahead-of-yellens-speech-2016-08-26) settled up 0.7% at $47.64 a barrel, but suffered their first weekly loss in a month (http://www.marketwatch.com/story/ oil-prices-retreat-ahead-of-yellens-speech-2016-08-26).

The Standard & Poor’s 500 index slipped 2 points, or 0.1 percent, to 2,169.