Yellen, in speech Friday, could send signal about next hike

Some economists say they think conditions are ripe for Yellen to alert investors that the central bank may be inclined to act at its next policy meeting, Sept. 20-21 — especially in light of recent remarks from other Fed officials.

Two close Yellen allies — William Dudley, president of the Federal Reserve Bank of New York, and Stanley Fischer, the Fed's vice chairman — have suggested in the past week that a strengthening economy will soon warrant a resumption of the rate hikes the Fed began in December.

Sung Won Sohn, an economics professor at California State University, Channel Islands, interpreted the officials' comments to suggest that support is growing among Yellen and others on the Fed's policymaking board for another rate increase as early as next month.

According to data from the CME Group, investors foresee only about a 24 percent probability of a rate hike in September and only about a 56 percent chance by December.

Diane Swonk, chief economist at DS Economics, suggested that one reason U.S. stock averages established highs so soon after Britain's June vote to leave the European Union escalated global economic fears is the belief among many that the Fed will leave rates alone until perhaps year's end.