Fed likely to adjust its statement as soon as the meeting on 17/18 March: Commerzbank

Quotes from Commerzbank Corporates & Markets:

-The Chairwoman of the Federal Reserve Board, Janet Yellen, has cautiously prepared markets for the normalisation of interest rates. In her Monetary Policy Report to Congress she indicated that the Fed would soon drop its assurance that it will be "patient" in raising interest rates. We expect the Fed to adjust its statement as soon as the meeting on 17/18 March.

-The new rhetoric is likely to go along the lines of Yellen's language regime: Assuming the labour market keeps improving, interest rates can be expected to be hiked once the Fed - "based on incoming data" - is sufficiently certain that the rate of inflation will move back towards its 2% target in the medium term. This wording emphasizes the data dependence of monetary policy.

-This is obviously aimed at dampening market expectations of interest rates being hiked two meetings after the buzzword, "patient", has been dropped. The Fed wants to gain more flexibility in deciding about the first interest rate hike. According to Yellen, the US central bank will rather consider the "lift-off" from meeting to meeting. We are looking for the first interest rate hike to take place at the September meeting.