The Fed discussed the levers it could use to get to higher rates, including interest paid to banks on reserves and the target Fed funds rate.
Yellen speaks at the Fed gathering Friday morning, and European Central Bank President Mario Draghi delivers his address that afternoon.
Read MoreJackson Hole confab will zero in on labor
"The Fed's on the back end of expansion and tapering and eventually raising rates. We know the direction. We don't necessarily know the timing and exact details," said Robert Sinche, global strategist at Pierpont Securities. "It's not clear what the ECB does next … Draghi accomplished a lot without doing much."
Sinche said the markets have been anticipating some move by the ECB, as the European economy shows signs of weakening. A form of quantitative easing, or bond buying, is one strategy. "In the case of the ECB and Draghi, I just think there's a lot of uncertainty about unconventional policy," Sinche said. "It's not just a short term policy issue. This is the kind of thing you discuss at Jackson Hole."
As for the Fed, he said it may have intentionally left Wall Street economists off the Jackson Hole invitation list this year in an effort to shift the discussion toward a longer term debate and not make it as policy focused as it was when Ben Bernanke was Fed chair. "I would think she would bias her comments to say as little as possible," he said.
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Milton Ezrati, Lord Abbett market strategist and senior economist, said that Yellen's attempt to focus on longer-term issues may in fact make her sound hawkish. "She's talking about the labor market in an amorphous way. It gives her tremendous maneuvering room….If she's like (Bernanke), and I suspect she will be … he always used Jackson Hole to take the longer view. The longer view always sounds more hawkish," he said. "Anybody who has any optimism about the real economy is going to sound hawkish at the Fed."
Besides the Fed Thursday, traders are watching some key data including weekly jobless claims at 8:30 a.m. EST; existing home sales at 10 a.m.; the Philadelphia Fed survey at 10 a.m. and leading indicators at 10 a.m.