Investing.com – Federal Reserve (Fed) chair Janet Yellen will make her first public appearance since the hawkish tone in the minutes from the U.S. central bank’s last policy move forced markets to recalibrate expectations for the continuation of monetary policy tightening.
The minutes themselves along with a string of Fed officials insisting that the June 14-15 meeting was live pushed the odds of rate hike at the next gathering from 4% before the publication of the minutes to close to 40%. However, Fed fund futures have since backed down and placed the odds at 26% as of close of market yesterday.
With the probability of an interest rate increase at the following meeting in July at 56%, that currently seems the most likely time for the first move.
However, the minutes clearly indicated that returning to the path of policy tightening would depend on the data, leaving markets to interpret how the U.S. economy is fairing and upping the importance of the economic data in the run up to the June meeting.
In this regard, market participants have their eyes trained on the typically-dovish Yellen to see if the Fed chair will give any hints on her view on the timing of the next hike.
Specifically, she is scheduled to receive an award from the Radcliffe Institute for Advanced Study at Harvard University later on Friday, though there is some confusion on the timing.
The Radcliffe schedule lists the “Lunch reflections by Ben Bernanke, conversation with Gregory Mankiw and Janet Yellen, and presentation of Radcliffe Medal” to begin at 12:30ET, or 16:30GMT.
However, the Federal Reserve calendar lists the “conversation with Professor Gregory Mankiw, followed by the presentation of the Radcliffe Medal to Chair Yellen” to happen at 13:15ET, or 17:15ET.
While markets awaited the day’s main event, U.S. futures pointed to a flat open. At 8:50AM GMT or 4:50AM ET, the blue-chip Dow futures inched up 0.01%, S&P 500 futures were unchanged and the Nasdaq 100 futures rose 0.11%.
The U.S. Dollar Index meanwhile rose 0.12% to 95.25. EUR/USD slipped 0.10% to 1.1182, USD/JPY edged down 0.05% to 109.71, and GBP/USD dropped 0.10% to 1.4655.