Yellen says continued economic improvement may trigger the start of Fed rate hikes this year

Federal Reserve Chair Janet Yellen says continued improvement in the U.S. economy means an increase in the Fed's key interest rate could come later this year.

But Yellen stresses that any rate increases would likely be very gradual.

The Fed has kept its benchmark rate at a record low near zero for more than six years. Yellen says in a speech in San Francisco that the time to start raising the rate could occur "sometime this year," though she says that time hasn't yet arrived.

She says that when the Fed does start raising rates, policymakers expect the increases to be "rather gradual" over the next few years. She says the experience of Japan over the past 20 years argues for a cautious approach.