>> The drumbeat toward a March rate hike from the Federal Reserve growing louder Friday. None other than Federal Reserve Chair Janet Yellen providing the strongest signal yet that rates are going up faster than earlier predicted. And are likely going to keep going higher, on her words.
>> In short, we currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect. Indeed at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations in which case, a further adjustment of the federal funds rate would likely be appropriate.
>> All that wonky talk, that's the sound of the Fed testing the waters. I'm Conway Gittens in New York. Yellen and her fellow policy makers taking a classic page from the Fed's playbook. Send up a warning flare in advance. If investors freak out, then backtrack, but if they don't, then full speed ahead.
This week Wall Street dramatically shifted its view towards a March rate hike after a number of key Fed officials seemed set on moving up the timetable. After Yellen's speech, market expectations climbed to an 80% chance the fed goes ahead in March. That's way up from the more than 30% chance priced in at the start of the week.
A market clearly liking what it hears, stocks are calm, while bond yields and the dollar remain at elevated levels. With the groundwork laid, now all the Fed has to do is make good on all this talk when it makes an announcement following a two day meeting, that starts March 14th.