Investing.com - Federal Reserve Chair Janet Yellen said Wednesday that the U.S. central bank remains on track to both raise interest rates and begin shrinking its balance sheet before the end of the year.
In prepared remarks released before her testimony to the House Financial Services committee, Yellen said the Fed is likely to unwind its stimulus despite low inflation.
"The Committee continues to expect that the evolution of the economy will warrant gradual increases in the federal funds rate over time to achieve and maintain maximum employment and stable prices."
Her testimony to the Senate Banking Committee will start at 10:00AM ET (1400GMT).
The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path.
Futures traders are pricing in around a 40% chance of a hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool.
USD/JPY was at 113.30 from 113.54 earlier, EUR/USD was trading at 1.1473 from around 1.1447 ahead of the release of the comments, while GBP/USD was at 1.2895 from 1.2877 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.35, compared to 95.54 shortly before Yellen’s remarks.
Meanwhile, U.S. stock futures pointed to a higher open. The Dow futures rose 64 points, or 0.3%, the S&P 500 futures added 7 points, or 0.3%, while the Nasdaq 100 futures tacked on 26 points, or 0.5%.
Elsewhere, in the commodities market, gold futures traded at $1,218.39 a troy ounce, compared to $1,214.67 ahead of the data, while crude oil traded at $45.73 a barrel from $45.69 earlier.