WASHINGTON (AP) – One by one, several Federal Reserve officials have signaled in recent days that the Fed is ready to resume raising interest rates as soon as this month. The question is whether the official who matters most – Chair Janet Yellen – will add her own voice to that impression.
When Yellen speaks Friday in Chicago on the topic of the Fed’s economic outlook, investors will parse her words for any hint of how likely the central bank is to raise its key short-term rate after it next meets March 14-15. Already, though, traders in futures markets have put the probability of a rate hike at 75 percent, according to data tracked by the CME Group. Just last week, that probability had been pegged at well below 50 percent.
But that was before some Fed officials began suggesting that the strengthening U.S. economy, signs of higher inflation and a surging stock market had bolstered the case for a rate hike.
On Tuesday, William Dudley, president of the Fed’s New York regional bank and a close Yellen ally, said the case for raising rates had “become a lot more compelling.:
On Wednesday, Lael Brainard, a Fed board member and previously a leading advocate of delaying rate increases, said she thought the case for another hike was strengthening.