The head of the U.S. central bank said Thursday that she expected the Federal Reserve to begin raising interest rates from record lows by the end of this year.
Janet Yellen made the comments in a speech after officials delayed a long-predicted interest rate hike last week. The delay prompted investors and others to question the timing of the rate increase.
In a lengthy academic presentation, Yellen said interest rate increases would come when inflation seemed likely to move closer to the central bank's 2 percent target rate. She said inflation had been held down by temporary factors, like the rising strength of the dollar and the falling price of oil. She also said inflation that was too low could hurt the economy by increasing the cost of repaying loans and prompting investors to put money into risky ventures.
Yellen spoke on a day that brought mixed news about the U.S. economy, with the Caterpillar company announcing it would cut 10,000 jobs and close a number of facilities over the next couple of years. Caterpillar was hurt by falling demand for commodities that are produced with the help of its equipment.
Meanwhile, the number of Americans signing up for unemployment insurance rose slightly last week but remained below 300,000. Experts said the relatively low level of layoffs was a sign of a healthy job market.
A separate report said sales of new homes rose solidly in August.