Market analysts have been mulling comments made by Yellen on Monday at an event in Philadelphia. Yellen struck a generally positive tone on the U.S. economy, warning markets against overreacting to the disappointing U.S. nonfarm payrolls number on Friday; adding that the central bank needed to raise rates, but stepped back from giving a specific time frame.
"My overall assessment is that the current stance of monetary policy is generally appropriate...At the same time, I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run," she said.
Markets had been entertaining the prospect of a U.S. interest rate rise in June, creating volatility in both stocks and commodities. But investors appear to have scrapped that view, helping push markets higher during Tuesday's trade.
"As financial markets continued to absorb the surprise of last Friday's disappointing May payrolls report it was no surprise to hear Fed chief Janet Yellen pretty much rule out the prospect of a move in June," Michael Hewson, chief market analyst at CMC Markets, wrote in a note.