Yellen tells Congress to expect more interest rate hikes

Janet Yellen
FILE - In this Thursday, March 23, 2017, file photo, Federal Reserve Chair Janet Yellen looks at documents while waiting to speak at the Federal Reserve System Community Development Research Conference in Washington. Beginning Wednesday, July 12, 2017, Yellen speaks to Congress about monetary policy and the state of the economy. (AP Photo/Cliff Owen, File)

WASHINGTON (AP) – Federal Reserve Chair Janet Yellen is telling Congress that the central bank expects to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year.

In her semiannual testimony on the economy, Yellen takes note of a number of encouraging factors, including strong job gains and rising household wealth that she said should fuel economic growth over the next two years.

She blames a recent slowdown in inflation on temporary factors. But she says Fed officials are watching developments closely to make sure that annual price gains move back toward the Fed’s 2 percent target.

Many economists believe the Fed, which has raised rates three times since December, will hike rates one more time this year.

(Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

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