As evidenced by Fed Chair Yellen’s more optimistic tone on Tuesday, the US Central Bank is likely to discuss raising rates during the upcoming March meeting of the Federal Open Market Committee. In her most hawkish comments yet, she remarked that “waiting too long to remove accommodation would be unwise,” suggesting that more monetary tightening will be forthcoming. However, in-line with other Fed officials, she maintained the position that any adjustments to policy would be largely data dependent.
Should inflation figures due later in the session come in hotter than expected, it could raise speculation further that March action is in play. During her testimony she also briefly broached the matter of fiscal policy, stating that it was the predominant source of uncertainty for the outlook. The dollar pushed higher on Yellen’s remarks, with USDCHF reaching the highest point since January.