The Federal Open Market Committee "continues to anticipate that gradual increases in the federal funds rate will be appropriate over time to achieve and sustain employment and inflation near our statutory objectives", Yellen said in Jackson Hole.
In her highly-anticipated speech at a conference of central bankers in Jackson Hole, Wyoming, Yellen noted that the USA economy is "now nearing the Federal Reserve's statutory goals of maximum employment and price stability".
Yellen told the gathering of central bankers from around the world the US economy was nearing the central bank's goals of maximum employment and price stability but she maintained that future hikes should be "gradual".
"Our view is that most officials will want to see more concrete evidence of a rebound in GDP growth and a rise in inflation towards the 2 percent target, with a December move still appearing the most likely outcome" for a rate rise, Capital Economics ventured.
In an August 26, 2016, speech to bankers and economists in Jackson Hole, Wyoming, Federal Reserve Chair Janet Yellen explained that in her opinion her evaluation of economic indicators indicates that a rate increase is both necessary and imminent.
Markets remained skeptical of the Fed's rate hike projections largely because of the perceived wide gap between what it has signalled and ultimately delivered.
Belisle said the majority of investors expecting a raise in the rate before the end of the year.
By contrast, the Bank of England cut rates in the United Kingdom from 0.5 per cent to 0.25 per cent this month, and has not raised rates since 2007.
Fed Vice Chair Stanley Fischer, however, told CNBC on Friday that a rate hike in September and more than one hike before the end of the year were possible, though he added that it would depend on future economic data.
The upcoming U.S. elections could also influence things happening in the economy, Fischer said, but the central bank would only react to signals of uncertainty that might be reflected in the economic data it would not try to become a political forecaster. Over the past year, central bank officials have watched warily as global financial markets have swung wildly over fears of a slowdown in China and Britain's decision to leave the European Union.
Banks have been advocating for a rate increase.
The perceived chances of a rate hike in September climbed to 36 per cent from 21 per cent the previous day, according to CME Group's FedWatch tool.
Fed policymakers have been struggling in their attempt to push rock-bottom interest rates closer to normal as the recovery from the Great Recession matures. The rate declined to near zero in 2008 in an unprecedented attempt to stimulate economic growth.
Still, some economists have said they think conditions are ripe for the Fed to boost rates next month. Growth in the first quarter was just a 0.8% annual rate, the slowest in two years.
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