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Fed could toughen policy stance as ECB takes easy money baton

Janet Yellen speaks with Mario Draghi during the Jackson Hole economic symposium in August.
Bradly Boner | Bloomberg | Getty Images

The European Central Bank's full throttle easing program comes as the Fed backs away from its easy ways, and the distinction between the two could become even greater when the Fed meets later this monthmeaning higher U.S. rates and a stronger dollar.

Some strategists expect the ECB's surprisingly robust easing program, and improvements in the U.S. economy to combine to give the Fed leverage to extend more hawkish talons at its September meeting. They say it could strike the language about keeping rates low for a "considerable period" from its statement, more clearly signaling its move to normalcy, expected next year.

U.S. Treasury yields were higher after the ECB Thursday cut three key interest rates, including its refinancing rate to 0.05 percent. It also drove its deposit rate deeper into negative territory, now charging 0.20 percent to banks that park money overnight.