Yellen says Fed could raise interest rates 'relatively soon'

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[November 17, 2016]  WASHINGTON (Reuters) - The Federal Reserve could raise U.S. interest rates "relatively soon" if economic data keeps pointing to an improving labor market and rising inflation, Fed Chair Janet Yellen said on Thursday in a clear hint the U.S. central bank could hike next month.

U.S. Federal Reserve Chair Janet Yellen speaks at "The Elusive 'Great' Recovery: Causes and Implications for Future Business Cycle Dynamics" conference hosted by the Federal Reserve Bank of Boston in Boston, Massachusetts, U.S., October 14, 2016. REUTERS/Mary Schwalm
 

Yellen said Fed policymakers at their meeting earlier in November judged that the case for a rate hike had strengthened.

"Such an increase could well become appropriate relatively soon," Yellen said in prepared remarks that were her first public comments since the United States elected Republican Donald Trump to be the country's next president.

Yellen, who was to deliver the remarks to lawmakers at 10 a.m. on Thursday, said the economy appeared on track to grow moderately, which would help bring about full employment and push inflation up and toward the Fed's 2 percent target.

She said current interest rate policy is stimulating economic output but the economy still has "a bit more room to run."

She said at this point she feels there is only a small risk the Fed is behind the curve on inflation, warranting only a gradual increase in the federal funds rate.

(Reporting by Jason Lange and Howard Schneider; Editing by Chizu Nomiyama)

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