Fed Chair Janet Yellen heads to Capitol Hill in the coming week, and Wall Street will be paying close attention to her assessments of the U.S. economy and how it might be affected by monetary-policy tightening.

Hawkish talk from the Fed has increased recently, with several members expressing confidence that the U.S. could withstand the slow withdrawal of some stimulus measures set up in the wake of the 2008 financial crisis. In minutes from a June policy meeting, members discussed starting to unwind the $4.5 trillion in bonds on its balance sheet and the possibility of another rate hike before the year is out.

On Friday, July 7, the Fed again laid those intentions bare. In its semiannual monetary policy report delivered before Yellen's testimony, the U.S. central bank said it expects "gradual" increases in the federal funds rate and said it's likely to start trimming reinvestment of proceeds from in its fixed-income portfolio later this year.

The Federal Open Market Committee, the monetary policy arm of the U.S. central bank, raised interest rates for the second time this year at its June 13-14 meeting. Yellen is set to deliver her semiannual testimony on monetary policy to the House Financial Services Committee on Wednesday, July 12, at 10 a.m. ET, and then to the Senate Banking Committee on Thursday, July 13, at 10 a.m. ET.

Yellen "could face some grilling as to why she is raising rates when the economy is still quite slow and inflation is nowhere to be seen," Euler Hermes North America chief economist Dan North told TheStreet. "The answer is, 'It's not inflation today -- it's inflation tomorrow.' It takes three to five quarters for changes in monetary policy to fully affect the economy, and with unemployment less than 4.5%, inflationary pressures are surely on the Fed's mind."

Also next week, San Francisco Fed President John C. Williams will discuss sustainable growth in the U.S. in Sydney, Australia on Monday, July 10; Fed Governor Lael Brainard will deliver the keynote address at the Conference on Normalizing Central Banks' Balance Sheets in New York City, and Minneapolis Fed President Neel Kashkari will participate in an economic roundtable on Tuesday, July 11.

On Wednesday, July 12, Kansas City Fed President Esther George will give her economic outlook at an event in Denver; Chicago Fed President Charles Evans will discuss monetary policy at an economic summit in Idaho on Thursday, July 13; and Dallas Fed President Robert Kaplan will participate in a Q&A in Mexico City on Friday, July 14.

The second-quarter earnings season kicks off at the end of the week with a number of notable reports from the banking sector. Citigroup Inc. (C) - Get Report , JPMorgan Chase & Co. (JPM) - Get Report , PNC Financial Services Group (PNC) - Get Report , and Wells Fargo & Co. (WFC) - Get Report are each set to disclose their quarterly financial performance on Friday morning.

Overall, analysts anticipate another quarter of above-average strength. CFRA Research anticipates 6.2% year-over-year earnings growth among S&P 500 companies, better than a 1.7% earnings decline seen in the same quarter a year earlier. The energy sector is expected to lead the pack, recovering from weakness over the previous two years.

"CFRA expects growth will come in better than the initial expectation as economic data remains stable, consumer confidence is at a high not seen since 2001, manufacturing data is improving and energy is expected to become a tailwind for the index," Lindsey Bell, investment strategist at CFRA Research, wrote in a note.

Also in earnings in the coming week, Barracuda Networks Inc. (CUDA) and WD-40 Co. (WDFC) - Get Report will report on Monday; PepsiCo Inc. (PEP) - Get Report on Tuesday; Fastenal Co. (FAST) - Get Report on Wednesday; and Delta Air Lines Inc. (DAL) - Get Report on Thursday.

Citigroup, Wells Fargo and PepsiCo are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells C, WFC and PEP? Learn more now.

On the economic calendar in the coming week, the Job Openings and Labor Turnover Survey for May will be released on Tuesday; the Fed's Beige Book on Wednesday afternoon; and producer prices for June on Thursday.

Friday is the busiest day by far. Consumer prices, retail sales, and industrial production for June will be released before the bell. Business inventories for May, and a preliminary reading on consumer sentiment for July are set for release mid-morning.

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