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This is what Yellen could say that would change everything

VIDEO4:0804:08
Expect Yellen to talk about Fed's 'tool kit': Randy Kroszner

The risk to markets Friday is that Fed Chair Janet Yellen simply sounds more ready than markets expect to raise rates for the second time in 10 years.

After listening to other Fed speakers Friday, traders were watching out for Yellen to go in the same direction - that the Fed could possibly still raise rates twice this year and as soon as September. Yellen speaks at 10 a.m. EDT.

"She could say we want to raise rates twice this year and the markets will get hit," said John Briggs, head of strategy at RBS. "The end game is the markets are going to take them out of September, if they signal it too strongly."

Already Friday, St. Louis Fed President James Bullard said September is possible for a hike but he sees a very slow trajectory for rate hikes. Atlanta Fed President Dennis Lockhart reportedly said that two rate hikes are possible this year, but one is more likely. And Cleveland Fed President Loretta Mester reiterated that September meeting is "live" for a rate hike discussion, and that the economy is picking up in the second half of the year.

Markets are currently pricing about a 30 percent chance of a rate hike in September and roughly 55 percent odds for December, said Briggs. But the markets have not expected Yellen to signal rate hike timing at all.

If she does, the reaction could be strong. "The dollar will go up. Stocks will go down and financial conditions will tighten and they'll blink," Briggs said.

That would also snap Treasury yields out of their slumber and pressure emerging market currencies, and gold and other commodities.

But many strategists and economists say more likely is that she will sound dovish, and the reason may be that she will choose to address a more wonky academic question about long-term Fed policy rather than talk about what the markets want to hear.