U.S. Federal Reserve Chair Janet Yellen will testify twice during the week when she delivers the semi-annual Monetary Policy Report to the House and Senate special committees. Each session will have the Fed Chief release a prepared statement and then take questions from Committee members. Given that there is no Federal Open Market Committee (FOMC) meeting in February this gives Yellen a chance to reassure the market about the Fed's intentions regarding potential monetary policy decisions. The March FOMC meeting is not expected to bring a rate hike, but stronger wages and an improvement on the unemployment rate will give the Fed food for thought.
U.S. economic indicators have been mixed. Employment is still considered the cornerstone of the recovery, but consumer and corporate spending are still lagging. U.S. retail sales to be delivered later this week should keep underperforming as consumers opt to save. The negative effects on inflation like the tumble in energy prices have not resulted in gas savings going to retailers. The rise in wages will give some breathing room to the central bank as it keeps in 2 percent inflation target.
Chair Yellen will face questions from the House Financial Services Committee on Wednesday, February 10 at 10:00 am EST and then from the Senate Banking Committee on Thursday, February 11 at 10:00 am EST. Investors will be on the lookout for comments on the next meeting of the Federal Open Market Committee (FOMC) on March 15 and 16