Fed Chair Yellen will be testifying in front of the House Financial Services Committee on Wednesday and Senate Banking Committee on Thursday. Her prepared remarks will be released at 8:30 am on Wednesday morning.
In that regard, Barclays Capital Research expects her to maintain that a modest removal of policy accommodation remains appropriate and to signal that the FOMC intends to start reducing the size of its balance sheet before year-end.
"We expect the Chair to reiterate the committee’s view that activity and labor markets continue to improve and the economic recovery remains intact. She will likely argue that the recent weakness in inflation is mostly a result of transitory factors and that continued improvements in labor markets and activity will push inflation higher over time," Barclays adds.
Reference: eFXnews
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