While unemployment has fallen significantly and inflation is starting to tick higher, Federal Reserve Chair Janet Yellen says she does not believe that the central bank has fallen behind the curve and needs to start pushing interest rates up more quickly.
But Yellen says that it would be "risky and unwise" to allow the economy to overheat by keeping interest rates too low for too long.
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In a speech at Stanford University, Yellen says she believes the central bank is on the "prudent" course of gradually raising rates.
Yellen says the Fed's approach should improve prospects that the economy will achieve sustainable growth, with the labor market operating at full employment and inflation running close to the central bank's 2 percent target.