Yellen's speech strongly signals beginning of rate-hiking cycle in December

US Federal Reserve Chair person Jannet Yellen started her speech discussing the cumulative progress made in reaching Fed's dual mandate and spoke about substantial improvement in labor markets. She said the committee stays short of achieving the inflation objective.

She did not specifically mention about the rate hiking cycle, she noted that "many FOMC participants indicated in September that they anticipated, in light of economic forecasts at the time, that it would be appropriate to raise the target rate for the federal funds rate by the end of the year." 

This is followed by citing the October statement, referencing the aptness of hiking the policy rate after some further progress in the labor markets. Fed was confident that inflation would be back to 2% over time.

She then said "on balance, economic and financial information received since our October meeting has been consistent with our expectations of continued improvement in the labor market. And, as I have noted, continuing improvement in the labor market helps strengthen confidence that inflation will move back to our 2 percent objective over the medium term." 

"Barring an extremely weak payroll print on Friday (eg, 50-75k), we believe conditions for a lift-off in December have been met in the eyes of the committee", says Barclays in a research note.