Analysts widely expect the Fed to hike rates at the December 13-14 policy meeting, one year after the first and only rate increase following the financial crisis. Photograph: (AFP)
Trump had criticised Yellen for maintaining low interest rates to support President Obama and create a 'false' economy
US Federal Reserve Chair Janet Yellen said that she will serve her full term despite President-elect Donald Trump's criticism of her performance in the past.
"I was confirmed by the Senate to a four-year term, which ends at the end of January of 2018, and it is fully my intention to serve out that term," Yellen told lawmakers on Thursday before the Joint Economic Committee of US Congress, Xinhua news agency reported.
Yellen spoke of the importance of central bank independence in her first public remarks after Trump's election. "We have really seen terrible economic outcomes in countries where central banks have been subject to political pressure," she said.
"It's critically important that a central bank have the ability to make judgments about how best to pursue those goals while being accountable for explaining its decisions and transparent in its decision-making," Yellen added.
Trump had criticised Yellen during the presidential campaign for maintaining low interest rates to support President Obama and create a "false" economy.
He had also spoken of replacing Yellen with a Republican after her term expires in 2018.
Markets were expecting a fiscal stimulus package from the Trump administration and the Republican-dominated Congress, Yellen was reported as saying.
An increase in interest rates could "become appropriate relatively soon" if incoming data provide further evidence of continued progress, she said. It thus raised market expectations of a rate hike at the Fed's next policy meeting on December 13-14.
Yellen said that if the central bank delays rate hikes for too long, it could force the Fed to tighten rates abruptly and could encourage excessive risk-taking and undermine financial stability.
(WION with inputs from agencies)