Fed officials predicted in December that the central bank would raise its benchmark rate three times during 2017, lifting the rate from its current range between 0.5 percent
and 0.75 percent to a range of 1.25 percent to 1.5 percent.
“At our upcoming meetings, the committee will evaluate whether employment
and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” Ms. Yellen said, referring to the Federal Open Market Committee, which sets monetary policy.
Ms. Yellen did not address the Fed’s role as a financial regulator in her opening remarks,
but the subject is likely to take center stage when Ms. Yellen fields questions from the banking committee later Tuesday morning.
The new chairman of the banking committee, Senator Michael D. Crapo, Republican of Idaho, said in his prepared remarks
that he hoped the Fed would cooperate with the Trump administration in its efforts to reduce financial regulation.
The unemployment rate was little changed over the last year, standing at 4.8 percent in January, even as the economy added an average of 190,000 jobs a month during the second half of 2016,
and an additional 227,000 jobs in the first month of 2017.
Charles Evans, president of the Federal Reserve Bank of Chicago, told reporters last week
that the expectation of three increases “is not unreasonable.” The comments are particularly noteworthy because Mr. Evans remains one of the strongest proponents of the Fed’s stimulus campaign
Job growth remains strong, and inflation is rising toward a healthier level, Ms. Yellen said in prepared testimony to the Senate Banking Committee.
Ms. Yellen also said the Fed remained pleased with the performance of the economy, and expected to continue increasing its benchmark interest rate.
