Federal Reserve chair Janet Yellen gave investors a pretty clear sign on Friday that the U.S. central bank is likely to raise its benchmark interest rate later this month — and more hikes to follow later this year.

In a speech on the central bank's economic outlook at the Executives' Club of Chicago on Friday, the Fed chair told the gathered audience that a slight increase to the federal funds rate would be "appropriate" when the bank next meets for a two-day policy meeting on March 14 and 15.

"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," Yellen said.

In Fed terms, that's as close as it gets to a bright green light.

• ANALYSIS: What were investors thinking? Of course interest rates have to rise

And more interest rate increases could follow, she said: "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."

Yellen noted that the U.S. economy is chugging along, cranking out an average of about 180,000 jobs a month at the moment. That's well above the range of between 75,000 and 125,000 that shold be expected just from growth in the labour force — and another sign the world's largest economy is heating up and finally ready to stand on its own two feet.

Yellen is the most recent Fed official to muse opening about rate hikes in recent days.

David Fuller's view

Commentators have been asking: how could polls for a March 2017 rate hike have risen from the low 20% region last week to nearly 90% today?  I only watch a little TV in the home gym but none of the answers I heard from Bloomberg made any sense, at least not to me. 

I actually think the Fed was waiting for Trump’s speech before Congress on Tuesday, half expecting that it might be a meltdown.  Instead, “Trump hit a home run”, as US commentators said immediately following the speech.  A relieved Fed can now do its job before it falls further behind the curve.