Yellen: Rate Hike Likely By Year's End

(RTTNews) - The Federal Reserve remains on track to raise interest rates by year's end, the nation's top central banker said Thursday.

A week after the Fed voted to keep interest rates at zero, Fed Chairman Janet Yellen said the more "prudent strategy is to begin tightening in a timely fashion and at a gradual pace."

"If the FOMC were to delay the start of the policy normalization process for too long, we would likely end up having to tighten policy relatively abruptly to keep the economy from significantly overshooting its goals," Yellen said in prepared remarks at the University of Massachusetts.

The speech was focused on inflation, which Yellen expects will return to 2% annual growth rate "over the next few years."

She addressed some of the global headwinds that the Fed cited in last week's statement as reason for not raising interest rates in September.

Despite problems in China and Europe, Yellen does not think these issues will prove large enough "to have a significant path of the path of policy."