The Federal Reserve's second rate hike since the 2008 recession could come as soon as next month.
Stocks closed mixed on Friday, paring earlier losses, after Federal Reserve Vice Chairman Stanley Fischer raised the possibility of an interest rate hike in September. Fed Chair Janet Yellen made the case for another rate hike earlier in the session.
The S&P 500 was down 0.15%, the Dow Jones Industrial Average slid 0.28%, and the Nasdaq gained 0.13%.
The U.S. economy has strengthened to the point where another rate hike will soon be warranted, Yellen said in a widely anticipated speech at the Economic Policy Symposium in Jackson Hole, Wyo.
"In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months," Yellen said in a speech prepared for delivery to the Jackson Hole summit.
Yellen said she expects "moderate growth" in GDP and further tightening in the labor market over the next few years. She also reiterated that the decision on interest rates will "always depend on the degree to which incoming data continues to confirm the Fed policy committee's outlook."
Fischer backed up Yellen's confidence, noting that the overall trends in the U.S. economy are looking better and that Yellen's address is consistent with a September move. Fischer added that the August jobs report out next Friday will factor into the Fed's decision. The Fed will meet on Sept. 19-20.