Federal Reserve likely to raise rates in March: Yellen

By Ovunc Kutlu

NEW YORK

Federal Reserve Chair Janet Yellen said Friday the bank is likely to raise its benchmark interest rate this month.

"We currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect," she said in an address in Chicago.

"At our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," she added.

The U.S. unemployment rate was at 4.8 percent in January, and inflation was at 1.9 percent -- both in range of the Fed's targets.

The Fed last raised interest rates in December to between 0.5 percent to 0.75 percent. It was the second rate hike in more than a decade.

Rates have been at historically low levels since 2008. While the economy recovers from the great recession, the central bank signaled a gradual increase of interest rates.

Fed Vice Chair Stanley Fischer said earlier Friday that recent macroeconomic data has been positive.

“There is almost no economic indicator that has come in badly in the last three months," he said in New York.

The Fed said in December it expects three interest rate increases this year, each by 25 basis points.

The bank will announce its next interest rate decision at the conclusion of its two-day meeting March 15.