What to watch for when Yellen speaks at 1 pm ET (1800 GMT)
Credit Agricole: Yellen to seal the deal for March.
On Friday, the Fed will get the last chance to manage market expectations for the March meeting with key appearances from Fed Chair Yellen and Vice Chair Fischer. Given that both regional Fed Presidents and Governors who spoke earlier this week have delivered a consistently hawkish message, we see this as likely a deliberate attempt to manage expectations for March. Thus we would be surprised to see Chair Yellen deviate significantly from the script, especially since a March hike is 70% priced in. In fact since the next move is already in the price the focus for the Fed commentary and the upcoming policy meeting may be shifting towards the overall message and the timing of the following policy move and the aggressiveness of the overall cycle. In terms of economic data, the nonfarm payrolls report is not due until the following week but we will be watching the employment component in Friday’s non-manufacturing ISM release. As for the headline number we expect a moderate decline to 55.5.
