Here comes Fed Chair Janet Yellen ...
She heads to the House Financial Services Committee on Wednesday.
Wall Street doesn't expect to hear anything from Yellen that substantially differs from January's FOMC statement.
What we might see, in light of Senator Rand Paul's "Audit the Fed" proposal, is plenty of questions about whether Congress should have more oversight on monetary policy.
Here's a roundup of Wall Street analysts on what could happen today.
Joseph LaVorgna at Deutsche Bank:
We expect Ms. Yellen's testimony to largely mirror the minutes from the January 27-28 FOMC meeting, which did not indicate any substantive changes to the projections for near-term growth or long-term inflation compared to the Fed's December forecasts. However, Yellen may sound even more upbeat on the economy in light of the strong January employment report. If recent Fed-speak is any indication, the Chair will likely be making the case to Congress that the time is approaching for the Fed to begin the process of policy normalization, and if the data continue to support the Fed's forecast, this could commence around the middle of this year.
From Bespoke Investment Group's morning note:
We don't foresee a shift in policy communication from the Chair given the clear indication from the minutes that FOMC members are not unified on whether the economy is ready for rate hikes. As such, if we do see an extremely hawkish series of statements from the Chair, we will be very surprised (as will the markets); it would have to come from a gaffe of some kind given Yellen's clear preference for consensus management of the FOMC.
From Goldman's macro research note:
The testimony will probably not be a major market mover. Indeed, the average absolute yield change around the Fed Chair's semi-annual testimony has declined over time and is considerably lower than the average absolute change around post-FOMC press conferences. Nonetheless, to the extent there are risks to our "don't rock the boat" expectation, we think they are skewed toward a slightly more dovish tilt.