Expect Janet Yellen to remain dovish at this week's Fed meeting: Strategist

Who blinks first on rates?
Who blinks first on rates?

Federal Reserve Chair Janet Yellen will likely strike a dovish tone on interest rates against a backdrop of middling economic growth and slowly rising inflation, Ameriprise Financial Chief Market Strategist David Joy said Tuesday.

The Fed's policymaking committee kicks off a two-day meeting Tuesday. Wall Street is not expecting the central bank to raise rates, but investors will be listening for clues about the path of future rate hikes during Yellen's press conference at the close of the meeting on Wednesday.

Markets rallied last month after Yellen said the Fed would "proceed cautiously in adjusting policy" in remarks to the Economic Club of New York. The Fed raised benchmark rates by a quarter of a percent in December.

"She indicated more or less the possibility of two rate increases. We think that that's still a realistic possibility," Joy told CNBC's "Squawk Box." "Probably one is more likely between now and the end of the year, but I think they're going to leave it exactly where she indicated."

A steepening yield curve in bond markets indicates that economic activity is picking up, and disinflationary pressures are easing, he added. Inflation could rise toward the Fed's 2-percent target by the end of the year, he said.

Still, there is too little evidence the economy is gaining traction, so markets would likely react poorly to a rate hike in the near term, Joy said. The Fed is unlikely to raise rates in April or June, he said.

Analysts expect the Commerce Department to revise down its third and final read of GDP growth in the fourth quarter of 2015 to 0.7 percent from a .