Yellen is due to give a semi-annual testimony to the Senate on Tuesday and the House of Representatives on Wednesday.

We expect investors to be on the lookout for any hints on whether she is likely to vote in favor of a rate hike at the upcoming meetings. She was relatively upbeat in her latest speech, indicating that the US is near maximum employment and that inflation is moving toward the Feds goal. Yellen is expected to reiterate the need for gradual monetary tightening as the U.S economy picks up, yet with inflation still off target.

The market sees no further hikes before the Feds meeting in June. Analysts believe more clarity in Trump's stimulus plans is needed before the Feds can bring this on board. Yellen is expected to be asked about her future at the Federal Reserve as her mandate ends early next year.

Analysts expect Trump to confine his influence over the Fed by using his power to appoint new members. Given that economic data has been generally solid, we expect her to retain her optimistic stance, which may support the markets.

The Fed Chair also said that the timing of the next rate hike will depend on the economy over the coming months. Given that information, we see that the US data has been generally strong if one overlooks the disappointing wage growth in January. We do not see a material reason for Yellen to deviate from her previously optimistic stance. Overall confident remarks from the Fed chief, with regard to the economy and the Feds progress towards its dual mandate, could cause the probability for a March hike to surge. Currently, that probability is almost 18%, according to the Fed funds futures.