The prepared statement by Janet Yellen repeats many of the previous statements: another hike and the balance sheet reduction are expected this week. However, she also says that “the Fed does not need to hike all that much further to hit neutral”.

The economy is growing at a moderate pace, expected to pick up in H2. Employment and inflation are expected to rise. Inflation is a big uncertainty for the Fed.

Some transitory factors are likely to fall out and push inflation higher, but uncertainty is high. They are carefully monitoring the situation.

The USD is mixed. Update: the US dollar is on the back foot after the initial hesitation.

More coming..

Fed Chair Janet Yellen begins her testimony at 14:00 GMT but her prepared statement is released already now, 12:30 GMT.

Jobs are looking great and growth is mediocre. Wages are stuck at 2.5% and inflation is weak. The big question is: will Yellen focus on the upside or the downside?

And what will the Federal Reserve do next? They are expected to begin unwinding the QE program (aka QT) in September and raise rates again in December, but everything is open.