Federal Reserve Chairwoman Janet Yellen delivers the the U.S. central bank's Semiannual Monetary Policy Report to Congress on February 11, 2016. Friday, Yellen said during a speech at Harvard University that she expects the Federal Open Market Committee to raise key interest rates in "the coming months," for the first time since December. File Photo by Kevin Dietsch/UPI | License Photo
WASHINGTON, May 27 (UPI) -- Federal Reserve Chairwoman Janet Yellen said Friday she expects the U.S. central bank will again raise benchmark interest rates "in the coming months," due to an improving domestic economy.
During a ceremonial event at Harvard University Friday, at which she received the 2016 Radcliffe Medal, the Fed's top official noted that additional improvements to the U.S. economy will likely warrant another rate boost, which last happened in December for the first time in years.
"It has been a slow recovery, but we've made a great deal of progress," the Yale graduate said Friday after receiving the medal, which is given annually to "an individual who has had a transformative impact on society."
"It's appropriate -- and I've said this in the past -- for the Fed to gradually and cautiously increase our overnight interest rate over time," she continued. "Probably in the coming months, such a move would be appropriate."
Yellen's remarks indicated that the Fed might raise rates at the next meeting of the Federal Open Market Committee, scheduled for June 14-15, but she did not explicitly state whether she believed it would happen at that conference
Previously, though, the Federal Reserve chairwoman said she expected two rate increases in 2016. So far, neither of those have occurred.
The FOMC last met in April but declined to raise the benchmark rate, largely because U.S. inflation remained below the bank's target threshold of 2 percent.
Nearly six months ago, the Fed raised the rate for the first time since the start of the financial crisis in 2008. In the years that followed, the rate remained near zero until the quarter point bump in December.
"The economy is continuing to improve," she said, discussing the domestic economy with Harvard economics professor Gregory Mankiw, noting that she expects inflation to "move up over the next couple of years to our 2 percent objective."
The U.S. labor market has continued to improve in recent weeks, Bloomberg reported Friday, as the jobless rate has declined to 5 percent -- which many analysts consider to be near full employment.
Yellen is expected to speak publicly again on June 6 in Philadelphia, three days after the U.S. Department of Labor releases its May jobs report -- which is expected to influence the Fed's meeting and interest rate decision a week later.
Friday's remarks from Yellen also touched off a wave of selling of U.S. government bonds.