ANALYST'S VIEWPOINT: Expectations are high that the Federal Reserve will raise interest rates this month.
United States stock markets closed down on Thursday, as financials declined after surging a day earlier on increased expectations of a rate hike this month.
In her comments, Yellen also said rates are likely to risefaster this year as the economy for the first time in her tenureappears clear of any imminent hurdles at home or overseas. As of Friday mid-day, the odds of a March rate hike were above 75 percent, according to CME Group's FedWatch program, up from only 25 percent at the beginning of February.
A late wave of buying has helped nudge USA stock indexes slightly higher after a day of mostly listless trading. The 10-year Treasury yield held steady at 2.48%. The gap between them and their German equivalents increased to its widest since 2000.
Federal Reserve Board governors Jerome Powell and Lael Brainard, New York Fed President William Dudley, San Francisco Federal Reserve Bank President John Williams and Dallas Federal Reserve Bank President Robert Kaplan have all indicated a rate hike is on the table.
The timing was notable, with Fed officials speaking just hours before President Trump's speech before Congress.
European shares gained, with basic resources the top-performers on Trump's promise of $1 trillion of infrastructure spending.
Marvell Technology rose 2 per cent after the semiconductor maker's latest earnings and outlook beat estimates.
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The global MSCI index, which has risen more than 10 percent since Trump's election in November, was flat, with gains in Europe offsetting earlier falls on Asian and USA bourses.
Japan's Topix was down 0.2 per cent.
Trump pledged to overhaul the immigration system, improve jobs and wages for Americans and deliver "massive" tax relief to the middle class and tax cuts for companies, but offered few clues on how they would be achieved. "The market has so far remained patient with little actual details of these policies revealed", James Woods, global investment analyst at Rivkin in Sydney, wrote in a note.
U.S. stock futures still pointed to a higher open after Trump's address. The Dow Jones Industrial Average hit highs for 12 consecutive sessions through February 27, after breaking 20,000 points for the first time that month.
Other parts of the market lagged.
"We realize that waiting too long to scale back some of our support could potentially require us to raise rates rapidly sometime down the road, which in turn could risk disrupting financial markets and pushing the economy into recession", she said.
Against Japan's curency, the greenback climbed 1.05 per cent to touch a two-week high of 114.04 yen.