At the recent semi-annual testimony, Fed chairman Janet Yellen turned less dovish by saying that 'if the labor market continues to improve more quickly than anticipated by the Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned.'
It thus seems likely that the Fed statement on Wednesday will also have a hawkish twist giving an acknowledgement that the labour market is improving faster than expected.
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