Yellen out of reasons to delay hike?

By most real indicators, the U.S. economy is not too hot or cold, yet financial markets are betting that a core group of Federal Reserve officials who set interest rates are suddenly raring to go.

They could have those convictions confirmed or tempered when Fed Chairwoman Janet Yellen gives an economic outlook speech in Chicago on Friday. If her remarks from January are a guide, Yellen will give investors an update on progress toward the Fed's goals of full employment and stable prices.

It wouldn't be hard to make a case for higher rates, and doing so would put Yellen in line with many of her colleagues. But part of Yellen's style also is to offer caveats on headline indicators.

Depending on how Yellen balances her comments, she could set up a March increase or walk back market expectations, which currently place odds of an increase this month at about 88 percent.

Even ahead of Yellen, other voters on the Federal Open Market Committee have been making it clear that they favor an increase soon, stirring expectations in financial markets that saw only about a 40 percent chance of a hike at the end of last week.

On Wednesday, Fed Reserve Governor Lael Brainard - who has long been a proponent of keeping rates lower for longer - reversed course, saying that 'the economy appears to be at a transition” and 'it will likely be appropriate soon to remove additional accommodation.”

William Dudley, the committee's vice chairman and president of the New York Fed, told CNN International in an interview on Tuesday that the case for a rate increase has become 'a lot more compelling.” Those statements matter because the Fed decides on policy as a group, though Yellen's voice is the most important one at the table.