Research Team at Lloyds Bank, suggests that the Fed Chair Yellen, in her initial testimony, takes a balanced position. Key Quotes “She has acknowledged that recent economic data have been mixed and that recent market turmoil might impede economic growth. However, while recognising the potential downside risks to economic growth, she has also restated a belief that the most likely outcome is that US economic conditions continue to improve and that interest rates rise gradually. She doesn’t give any timeframe for any further interest rate moves, but the implication seems to be that, while a March interest rate hike now looks highly unlikely, rises from the June meeting onward, remain possible. We continue to think that two interest rate rises remain likely in 2016, but this is in part dependent on markets settling down. The overall message is that the Fed is not certain what to make of recent developments and so for now is just ‘monitoring’ the situation. The majority on the policy making board remain hopeful that economic conditions will continue to improve but are wary that markets may be sending them a very different message.” For more information, read our latest forex news.