Rate hike likely in 2015, says Yellen

USA, July-16 US Federal Reserve chair Janet Yellen said prospects are good for further improvement in the labour market and the economy, keeping the central bank on track for an interest-rate increase in 2015. "If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target," Yellen said in a testimony on Wednesday before the US House Financial Services Committee in Washington.

She said Fed officials expect growth "to strengthen over the remainder of this year and the unemployment rate to decline gradually".

Yellen, 68, again emphasized that the timing of the first rate rise in almost a decade is less important than the subsequent path of increases, which she said would be gradual. She said Fed forecasts for higher rates this year are projections and "not statements of intent to raise rates at any particular time".

In the first of two scheduled days of testimony before the US Congress, Yellen repeated that the Fed will tighten policy when it sees more improvement in the labour market and is "reasonably confident" that inflation will head back toward 2% in the medium term.