Traders, though, are pricing in just two moves - in June and December.
Larson also noted the Fed has some degree of hesitation regarding what the fiscal stimulus will look like.
All three major indices set records for the fourth straight session, with the Dow Jones Industrial Average up 92.25 points (0.45 per cent) at 20,504.41. Goldman Sachs Group Inc (GS) and J.P. Morgan Chase & Co (JPM) led the gainers, up more than 1%. The Nasdaq Composite is off 0.1% at 5,761.53.
Her comments on monetary policy gave few additional hints on the timing of the Fed's next rate increase and how many of them were planned for 2017, as she repeated familiar statements that "monetary policy is not on a preset course".
The greenback was supported by the 10-year Treasury yield, which rose to as high as 2.5 percent after trading under 2.43 percent at the start of the day, as investors boosted the probability of a March rate increase to about 34 percent. As discussed in our preview for the testimony today, this means that the door for a Fed rate hike in March is not off the table.
Various cheeses recalled due to listeria concerns
Listeria can cause serious and sometimes fatal infections in young children, elderly, or others with a weakened immune system. Meijer said to date there have been no known illnesses reported from the recalled products.
The Fed signalled in December that it expected to raise rates three times in 2017. She said a rate increase may be on the horizon if employment and inflation continues to follow the central bank's forecast, Bloomberg reported. The central bank's current rate target lies between 0.5% and 0.75% after raising rates twice a year ago and said there would three further hikes in 2017.
Yellen played the part of both dove and hawk in her remarks on Capitol Hill, reiterating that rate hikes would be gradual but pointing out that it would be "unwise" to wait too long to hike again. Lacker, who is not a voting member of the Federal Open Market Committee, said current unemployment and inflation levels call for tighter monetary policy. And that has caused the dollar to jump, oil and gold to rise, and Treasury yields to surge. The 10-year Treasury note advanced 5.1 basis points to 2.486%, compared with 2.434% late Monday in NY.
Adding to the upward pressure on interest rates was data showing producer price inflation is heating up.
Stephen G. Cecchetti, a professor at Brandeis International Business School and a former adviser at the Bank for International Settlements in Basel, Switzerland, criticized the letter in a blog post, saying that US regulators have played a major role in shaping international financial regulations in past decades, to the benefit of American consumers and businesses. Core prices, excluding food and energy, rose by 0.2%.
"It's actually a very wise move to try to get the rate hikes going sooner rather than later to cut off the potential for inflation, although I really don't see inflation picking up all that much over the next year or so", said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. The dollar pivoted higher as Yellen began to speak in front of the Senate, and gained against the British pound (http://www.marketwatch.com/story/why-the-pound-plunged-the-most-in-12-days-after-uk-inflation-miss-2017-02-14) after United Kingdom inflation data didn't rise by as much as expected.