As Expectations Of December Rate Hike Grow, Analysts Look To US Fed Policymakers For Direction

Investors and analysts are hoping to glean further clues to the prospects of a rate hike by the U.S. Federal Reserve before year-end when half a dozen Fed speakers express their views on monetary policy Thursday. Additionally, U.S. weekly jobless claims figures -- also expected to be released Thursday -- will be closely watched as they come close on the heels of strong October payroll data.

In recent weeks, Fed officials, including Chairwoman Janet Yellen, have talked up their intention to hike key interest rates -- currently at record lows -- in December. Last week, during testimony before a congressional committee, Yellen said a December rate hike was a “live possibility,” and, most recently, on Tuesday, San Francisco Fed chief John Williams also said there was “a very strong case” for doing so.

“I don't see much evidence of fragility or lack of momentum.… At some point, just the improvement in the economy with the passage of time starts to outweigh some of the concerns of potential risk,” Williams, a voting member of the Fed’s policymaking committee, reportedly said.

The Fed hasn’t raised its benchmark rate in nearly 10 years, and it’s been near zero since the peak of the 2008 financial crisis. Prevailing weakness in global markets and a still-fragile U.S. economy has led some Fed policymakers to advocate waiting until next year to lift rates. However, other, more hawkish Fed members have come out in favor of a modest rate hike in December, citing strong jobs data and a drop in unemployment rate, which fell to a seven-and-a-half year low of 5 percent in October.

“I think they're likely to reinforce the idea they have this [rate hike] as a tool and they’re going to use this if possible. The most recent information and icing on the cake that gives them the opportunity to raise rates was the 2.5 percent year-over-year wage inflation,” Zane Brown, a fixed income strategist at investment management firm Lord Abbett, told CNBC.

In addition to Yellen, other Fed officials speaking Thursday include Fed Vice Chair Stanley Fischer in Washington, St. Louis Fed President James Bullard and Richmond Fed President Jeffrey Lacker, who will speak on the economy and policy at the Cato Institute's annual monetary conference, Chicago Fed President Charles Evans at a National Communities Council conference in Chicago, and New York Fed chief William Dudley.