Fed's Yellen Says Appropriate To Raise Interest Rates This Year

Federal Reserve Chairwoman Janet Yellen said Thursday that she believes it remains "appropriate" for the U.S. central bank to hike rates this year. In a speech at the University of Massachusetts Amherst, Yellen said she expects inflation will return to 2% annual growth rate "over the next few years" as temporary factors holding it down wane. This forecast assumes economic growth remains strong and inflation expectations stay well anchored, Yellen said. "Most FOMC participants, including myself, currently anticipate that achieving these conditions will likely entail an initial increase in the federal funds rate later this year, followed by a gradual pace of tightening thereafter." While the U.S. central bank is monitoring signs of weaker growth overseas, she does not think these effects will prove large enough "to have a significant path of the path of policy."