Remember Yellen is a Dove

Despite the fears of an aggressive Fed, look back at their history.  Their forecasts have been horrible, and you can't take them for their word about future rate hikes.  The bond market sees this, and is not pricing in anything close to what the Fed dot plot forecasts for rates in 2018 and 2019.  There is a high probability that Yellen will be less hawkish than expected, so they don't box themselves into a set number of hikes and backtrack again, like they did last year.

You will probably get a small rally out of that, but the markets are going to be setting up for the French elections, which is the next big event.  Market has been trading weak ever since the all time high on March 1.  Even with all the inflows this month, the market hasn't been able to rally.  In a word, it feels like buyer saturation.  It is just not going to be easy to rocket higher from here until you get a resolution to the French elections and more certainty on tax reform.

Based on what I think Yellen will do, I would be long bonds and it might be worth a small long in stocks for a trade.  I am long bonds, but will not buy stocks here, as I expect them to be lower later this month.   2.60% seems to have held up against the bear forces and it looks like a double top and a buy zone from this paper napkin chartist.