Futures dip ahead of Yellen's speech

"Futures dip ahead of Yellen's speech"

Mar 03, 18:00 GMT - Fed's Yellen Speech: The big question for the markets is not only if the Fed will raise interest rates, but when. It looks likely that the next increase will take place later on March and currently the markets are thinking there is an 88% chance of a hike this month. Fed Chair Yellen will give her economic outlook speech on Friday evening, where it is expected that Yellen will give the latest updates on progress toward the Fed’s goals of full employment and stable prices.

As the U.S economy is doing well, however the low interest rates are not at a true level and are distorting the real picture. Leaving the interest rates at their current levels will have a negative impact on the economy, and therefore the markets are leaning towards an increase, sooner rather than later. Furthermore, the U.S dollar reached a seven-week high on Wednesday on the hopes of a March rate hike following hawkish comments from two top officials, which overshadowed president Trumps congress address.

Any indications of a March interest rate increase could see more gains for the USD over its major currency rivals, and possibly push US indices higher than their all-time record levels recorded on Wednesday. 

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