Yellen says interest rates should rise in 'coming months'

Image source, AP

Federal Reserve chair Janet Yellen said she expects interest rates to rise in "the coming months" if the US economy continued to improve.

Speaking at a Q&A session at Harvard University, the Fed chair said gradual rate rises would be appropriate.

"If the labour market continues to improve, and I expect those things to occur ... in the coming months such a move would be appropriate," she said.

The central bank meets on 14-15 June to discuss raising rates.

The Fed raised interest rates by 0.25% for the first time in nine years last December and has left them unchanged since.

"We saw relatively weak growth last year, but growth looks to be picking up," Ms Yellen said.

On Friday, the US Commerce Department revised its estimate for first quarter GDP growth up to 0.8%, from the sluggish 0.5% originally estimated.

Unemployment was 5.5% in May - a level the Fed regards as good, although Ms Yellen did acknowledge that many part-time workers were still looking for full-time employment.

The Fed also wants to see US inflation rise to 2%.