This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Will Yellen Change Her 'Considerable Time' Position This Week?

NEW YORK (TheStreet) -- Will she or won't she?

Federal Reserve Chairman Janet Yellen has a chance to clarify her position on interest rate hikes this week when the central bank's Open Market Committee meets from Tuesday to Wednesday. The Fed chief will likely announce a further $10 billion reduction of monthly bond purchases.

The real story, however, will be clues in Yellen's statement on Wednesday as to when interest rates will be increased.

In March, the Fed changed of its original plan to keep the borrowing costs low until unemployment fell below 6.5%. The unemployment rate stood at 6.7% at the time. Yellen has changed that stance -- instead of the labor market benchmark, she said rates would stay low for "a considerable time" after the Fed's bond-buying program ends later this year.

The transition in policy led to a decline in stocks as a wave of uncertainty fell over the market. Yellen was unclear herself on what exactly "a considerable time" meant, but she has a chance to clarify her view at this month's meeting. Her comments come as both U.S. growth and employment figures will be released this week as well.

The U.S. growth figure will be released on Wednesday and will likely show an advance of 1.6% annualized. Cold weather has weighed on retail sales and the housing market in the first quarter, but economists believe a warm spring will lead to a rebound in growth of around 4% in the second quarter of this year.

The more anticipated number this week will most likely be the employment figure Friday.

Again, bad weather has been a drag on economic activity earlier in the year, disrupting employment data in both December and January. As spring approaches, however, we are likely to get better numbers that are more representative of the labor market's health.

Some analysts see payrolls accelerating with over 200,000 jobs added in April, which would be a great indication that the U.S. economy is on a strong path to recovery.

The abundance of both economic data and insight into U.S. monetary policy should keep equity and bonds markets very active this week. Expect periods of consolidation leading into events, and explosive moves either higher or lower once the market has fully processed the news at hand. SPY Chart
SPY data by YCharts

 

Follow @macroinsights

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,493.37 -69.93 -0.42%
S&P 500 1,925.15 -5.52 -0.29%
NASDAQ 4,352.6390 -17.1340 -0.39%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs