Is A Fed Rate Hike Imminent?

Patchy economic data from the U.S. sent Federal Reserve rate hike predictions on a rollercoaster over the past months as investors tried to figure out when the bank will feel comfortable easing further and allowing the U.S. economy to stand on its own.

Weakness in jobs reports and worries about equities being overvalued have given many a reason to believe that the bank will be cautious about raising rates, but rhetoric from the nation's central bankers this week suggested that a rate increase could be coming sooner rather than later.

Williams Hints At Hike

Related Link: With No Chance Of A Rate Hike, Investors To Focus On Fed's Economic Analysis

Speaking in New York, Williams said he sees steady improvement in the labor market and expects U.S. inflation to meet the Fed's 2 percent target in the medium term.

He also commented that he believed that the economy was in a place where it could withstand a rate hike.

June?

While Williams' comments suggest that the bank is ready to raise rates, most investors have ruled out a June rate hike, as the bank will likely need further confirmation that the economy is on track.

Additionally, outside factors like the economic struggles in Europe and China could still have a negative impact on the U.S., and policymakers will likely want to wait to see how the global economy plays out before changing rates.

Related Link: Leon Cooperman Predicts Fall/Winter Fed Hike, But Fails To "See The Significance"

So When?

The bank has been open about its plans to raise rates, though no concrete timeline has been given, making it difficult to pinpoint when interest rates will rise.

On Tuesday, New York Fed President William Dudley reiterated Fed Chair Janet Yellen's remarks, saying that he was unsure of when the rate hike would take place, but that it would be data dependent. Most analysts are expecting the bank to make a move in September and possibly raise rates again in December.