Janet Yellen says Federal Reserve will hike interest rates at some point this year

Federal Reserve chair Janet Yellen said the Fed will raise rates this year, but gave no hint if it would be more than once.

CLEVELAND – Federal Reserve chair Janet Yellen on Friday said she expects the Fed to boost interest rates sooner or later this year, but pointed strongly to her concerns that U.S. labour markets remain weak which more workers might be encouraged into the job market with stronger growth.

In a speech that cautioned about the status of workers as well as some of the international risks that have developed, Yellen gave no direct hint about whether she anticipates more than one rate hike over the Fed\’s four remaining meetings in 2015.

She said she expects the economy should grow steadily through out the year, which would a minimum of allow the Fed to move ahead using its first rate hike in nearly a decade.

\”I expect it will likely be appropriate at some point later this season to take the first step to raise the government funds rate and therefore begin normalizing monetary policy,\” Yellen said in a speech to the City Club of Cleveland, a civic group that sponsors high-level speakers.

\”But I wish to emphasize the course of the economy and inflation remains highly uncertain…We are watching carefully to see if there is continued improvement in labour market conditions, and we will need to be reasonably confident that inflation will move to 2 percent in the next few years.\”

Despite the improvement of latest years, she said labour markets remain from line, with high levels of part-time work and weak participation rates.

The low unemployment rate \”does not fully capture the extent of slack,\” she said. \”I think a substantial number of individuals still are not seeking work simply because they perceive a lack of good occupations and that a stronger economy would draw a number of them back into the labour force.\”

Yellen\’s remarks come just one week before she is to appear before Congress for any biannual briefing before lawmakers, and because the central bank approaches a likely rate hike decision.