That would imply that a flurry of signals from policy makers in recent weeks about the likelihood of tightening in March was more about a shift in the timing than in the number of increases the FOMC is likely to approve this year, according to Jonathan Wright, an economics professor at Johns Hopkins University.

“The data have been generally good over the last couple of months, but not in a way that materially changes the outlook on growth or inflation,” said Wright, a former Fed economist.

Economic Outlook

The FOMC's statement will probably continue to acknowledge ongoing improvements in the outlook for the U.S. economy following a string of better-than-expected economic data, including the Labor Department's latest report on the job market. That update, published March 10, showed 235,000 workers were added to payrolls in February, and the unemployment rate declined to 4.7%.

The report also showed large increases in headcount in the construction and manufacturing sectors, which parallel recent improvements in measures of business investment. The FOMC will probably acknowledge these trends by modifying a reference to “soft” business investment in the statement it published after its Jan. 31-Feb. 1 meeting, said Neil Dutta, head of U.S. economics at Renaissance Macro Research.

Still Gradualists

In her press conference, Yellen will probably face questions on whether this week's rate increase marks a pivot toward a faster pace of tightening.

“Yellen's job at the press conference will be to emphasize the 'gradual' part” of their rate projections, said Roberto Perli, a partner at Cornerstone Macro and former Fed economist. As for explaining tightening now rather than waiting until later in the year, “it is better from their perspective to take the opportunity when they have it, when they are confident about the prospects for the economy,” he said.

Minutes of the FOMC's Jan. 31-Feb. 1 meeting indicated the committee would begin discussing conditions that would warrant a change in management of the Fed's $4.5 trillion balance sheet at subsequent meetings. Currently, the Fed rolls over maturing securities it owns and the FOMC has said it expects to continue doing so until rate increases are well underway, on the premise that maintaining the balance sheet's current size supports the economy by helping to keep longer-term borrowing costs lower.

Yellen will probably dodge questions during the press conference about any potential changes to that strategy unless the committee has already come up with “something concrete, which is unlikely,” Perli said.

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