(Reuters) - Outgoing Federal Reserve Bank Chair Janet Yellen said on Friday that solid economic growth, faster wage increases, and a tightening labor market mean the U.S. central bank is likely to need to continue to raise interest rates gradually, as it has signaled it will.
“The economy is growing at a healthy, solid pace,” Yellen said in an interview with PBS NewsHour on the last day of her four-year term. “The job market is strong and inflation is low ... The Federal Reserve has been on a path of gradual rate increases, and if conditions continue as they have been, that process is likely to continue, and as it does we would expect long rates to move up.”
On Saturday she hands the reins to President Donald Trump’s pick to replace her, Governor Jerome Powell. She will stay in Washington as a fellow at the Brookings Institution, the think tank where former Fed Chair Ben Bernanke also works.
Reporting by Ann Saphir; Editing by James Dalgleish