U.S. equities and stock exchange traded funds climbed Wednesday as Federal Reserve Chairwomen Janet Yellen maintained a slow-and-steady monetary policy outlook.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEARCA:SPY), iShares Core S&P 500 ETF (NYSEARCA:IVV) and Vanguard 500 Index (NYSEARCA:VOO), were 0.7% higher Wednesday.
U.S. markets strengthened after Yellen said interest rate hikes would be gradual and will not have to rise much further to hit a neutral rate, Reuters reports.
“People heard what they wanted to hear,” Rob Bernstone, a managing director in equity trading at Credit Suisse Group AG, told the Wall Street Journal.
In a prepared testimony to Congress, Yellen contended the economy is healthy enough to absorb further rate hikes at a gradual pace, along with a slow wind down of the Fed’s $4.5 trillion bond hoard accumulated following the financial down turn.
The Fed chair illustrated an economy that is growing steadily, adding jobs, benefiting from steady household consumption and strengthening on increased business investment.