Reaction to Fed Chair Yellen’s semi-annual Testimony before the Senate triggered a sell-off in US Treasury yields and a broad US Dollar rally as she left the door open for a rate hike as soon as the next FOMC meeting in March. US equities initially wobbled, dragged lower by the rate sensitive utility sector, but they soon rallied as both the Dow and S&P closed again at new all-time highs with a gain of 0.40% and 0.32% respectively. In line with previous comments, Dr Yellen noted “waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession”. She also noted that if job gains and rising inflation continue as the Fed expects, an increase in the benchmark Federal Funds rate likely would be appropriate “at our upcoming meetings,”. In regards to potential changes to fiscal policy, the Fed Chair reiterated her view that it is too early to know, noting that most Fed officials “have taken the view that they want greater clarity about the size, timing, and composition” of fiscal policy before factoring its impact in their forecast.