Yellen testimony pushes US indices to fresh highs

US indices hit fresh record highs last night after incoming US Federal Reserve (Fed) chairman Janet Yellen indicated that she was likely to keep monetary policy loose when she takes over.

In a testimony to the Senate Banking Committee yesterday, Ms Yellen said the Fed’s accommodative policies, such as ultra-low interest rates and quantitative easing, would remain in place as long as the US economic recovery was still fragile.

Ms Yellen dismissed the idea that the loose monetary policy was creating bubble-like conditions, but acknowledged that the monthly $85bn (£52.9bn) QE programme could not continue forever.

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Her comments pushed the S&P 500 and the Dow Jones Industrial Average indices to fresh highs last night.

The Dow closed at 15,876, up 26.3 per cent in the past year, while the S&P 500 reached 1,791, up 32.2 per cent in the same period.