Federal Reserve Chair Janet Yellen said on Wednesday the U.S. central bank remains on track to raise interest rates this year, with labor markets expected to steadily improve and turmoil abroad unlikely to throw the U.S. economy off track.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate,” Yellen said in testimony prepared for the U.S. House of Representatives Financial Services Committee, affirming the view of a central bank prepared to gradually raise rates after more than six years at a near-zero level.
Labor markets are “not yet consistent with maximum employment,” she said. “Greece remains difficult. And China continues to grapple with the challenges posed by high debt, weak property markets, and volatile financial conditions.”
Still, “looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly.”
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