In the our news wrap Wednesday, Federal Reserve Chair Janet Yellen affirmed that short-term interest rates are likely to rise again in the coming months, but left the door open to change those plans. Also, Brazil's former president was convicted in a sweeping corruption probe.
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In the day’s other news: Federal Reserve Board Chair Janet Yellen affirmed that short-term interest rates are likely to rise again in the coming months. But she also left the door open to changing those plans. Yellen told a congressional hearing that a recent slowdown in inflation might make the Central Bank recalculate.
JANET YELLEN, Federal Reserve Chair:
Monetary policy is not on a preset course. We’re watching this very closely, and stand ready to adjust our policy if it appears that the inflation undershoot will be persistent.
Separately, Yellen said the Fed could begin to unload its massive bond holdings this year. It bought government bonds during and after the recession in order to lower long-term interest rates and to boost economic activity.
Wall Street took heart from Yellen’s talk of going slow on rate hikes. The Dow Jones industrial average gained 123 points to close at 21532. That’s a new record. The Nasdaq rose nearly 68 points, and the S&P 500 added 17.
One of Brazil’s former presidents, Luiz Inacio Lula da Silva, was convicted today in a sweeping corruption probe. A judge sentenced him to 9.5 years in prison, but for now he remains free, pending his appeal. Silva served as president from 2003 to 2010, and is still widely admired in Brazil.
In Saudi Arabia today, U.S. Secretary of State Rex Tillerson held talks, but made no apparent progress in ending a boycott of another Persian Gulf nation, Qatar. Tillerson met with King Salman, and later the Saudi crown prince, in the city of Jiddah. Later, he flew to Kuwait, and returns to Qatar tomorrow. The Saudis and other Arab states have accused Qatar of financing terrorism.
In Turkey, President Recep Tayyip Erdogan has rejected any talk of lifting a state of emergency. He imposed it last July after rogue soldiers tried to overthrow the government, killing more than 240 people. Erdogan visited graves of the victims yesterday, and he told international investors meeting in Ankara today that disloyal elements are still at large.
PRESIDENT RECEP TAYYIP ERDOGAN, Turkey (through interpreter):
What are we supposed to do with all this happening? They say lift the state of emergency. This won’t happen. I had an interview with an international media organization. They asked if the state of emergency will finish. It will finish when this business is completely out of the way.
Erdogan’s opponents say that he has used emergency rule to quash dissent.
There is word that Chinese political dissident and Nobel peace laureate Liu Xiaobo is now in critical condition. A hospital in Shenyang, reported today he is suffering multiple organ failure. Liu has late-stage liver cancer. He was released from prison on medical leave just last month.
Back in this country, the Royal Bank of Scotland has agreed on a settlement with U.S. regulators, and will pay $5.5 billion. It involves claims that the bank sold billions of dollars of toxic mortgage-backed securities before the 2008 financial meltdown.
And President Trump lost his nominee today to lead the Federal Deposit Insurance Corporation. James Clinger cited family-related obligations that had prompted him to leave government service earlier this year. He said that they have grown more challenging in the interim.