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Most analysts expect at least two interest rate hikes this year [Xinhua]
“Now it’s fair to say the economy is near maximum employment and inflation is moving toward our goal,” Yellen told members of the Commonwealth Club in San Francisco Wednesday evening.
The current unemployment rate is 4.7 per cent.
As a result, she said, the Fed would likely raise interest rates a number of times this year.
“As the economy approaches our objectives, it makes sense to gradually reduce the level of monetary policy support,” she added.
Most analysts predict at least two, possibly three, rate hikes in 2017.
Previously, Yellen had warned that industrial production was lower than the Fed would have liked.
But on Wednesday, after a drop in factory, mines and utilities output in November, the Fed said that indusrial output rose by 0.8 per cent in December.
This is the fastest pace of industrial output growth in just over two years, the Fed said.
And according to the US Bureau of Labor Statistics, the Consumer Price Index rose 0.3 per cent in December to top 2.1 per cent for 2016, the highest level in nearly three years.
The Bureau’s latest data also indicated that inflation had passed two per cent in December, coming in line with the Fed’s desired levels which define a healthy economy.
The BRICS Post with inputs from Agencies
