"Financial conditions tightened last week, a reminder of the near-term uncertainty of the response of financial conditions to the Federal Reserve beginning the long process of 'normalizing' its interest rate policy. But given how strongly this policy shift has been signaled by policymakers, including Yellen herself, we think last week's selloff is unlikely to delay liftoff," they wrote in a note on Monday.
After Wednesday's meeting, the attention will shift quickly to when the next hike is coming, said ANZ, noting that Fed officials have indicated that tightening will be gradual.
Although the markets may see downside after the first expected rate hike this week, the Fed is unlikely to be sympathetic to investors.
"We doubt the Fed will be able to satisfy expectations for a 'dovish hike'", said Bank of America Merrill Lynch's global and US economist Michael Hanson in a note, adding that Yellen's remarks are likely to be dovish – "although perhaps not as dovish as the market hopes".