Federal Reserve Chair Janet Yellen said the Fed is on track to start raising interest rates later this year but expressed multiple concerns over headwinds that are still holding back the U.S. economy.
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She described the outlook for the economy and inflation as "highly uncertain," amid lingering weakness in the labor market and new potential threats overseas.
Yellen, speaking on the economy for the first time since the Fed's June meeting, saw reasons for encouragement. Consumer spending appears to be picking up, and employment is likely to keep expanding, she said.
"Based on my outlook, I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate," Yellen said, referring to the Fed's key short-term interest rate, which has been at a record low near zero since December 2008.