Wall Street posted declines after comments of Treasury Secretary Janet Yellen, Warren Buffet, and Mohamed El-Erian regarding inflation, describes Markets Insider.
- Yellen on Tuesday said interest rates will have to rise to ensure that the economy does not overheat, leading the markets to close lower.
- Following the comments, the S&P 500 closed down 0.66% to 41,65.05, the Nasdaq composite fell 1.88% to 13,633.50, while the Dow Jones industrial average gained 22.11 points or 0.06% to 34,135.34.
- Yellen later backtracked and said she does not believe there is going to be an inflationary problem.
- Billionaire Warren Buffett over the weekend said the market is seeing “very substantial inflation,” and the increase in prices are being “accepted.”
- Allianz Chief Economic Adviser Mohamed El-Erian also earlier this week raised doubts over remarks of the Federal Reserve that inflation is “transitory.”
- The Fed targets inflation at around 2%. Headline inflation clocked in at 2.3% in March, while the April print is due to be released May 12.