However, a few felt any further rate hikes should be delayed until they see inflation moving higher, minutes of their last meeting revealed.
The readout from the October 31-Nov. "Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term".
In the minutes, policymakers engaged in what has become a regular debate over why inflation has remained below the Fed's 2% target for several years.
Yellen's comments at New York University echoed previous remarks on inflation, indicating that the Fed is still preparing to boost rates again in December, its third hike this year.
The minutes of the last meeting showed there is still a division between those who are anxious that the Fed might be moving too slowly amid low unemployment and those still concerned that inflation is falling short of expectations.
A vocal minority on the Fed's Federal Open Market Committee, which sets benchmark USA interest rates, have strenuously disagreed over the course of this year's policy meetings, however, pointing to slack in labor markets and the absence of any upward trend in price pressures.
Dr Yellen said that with rates so low by historical standards, the central bank would have less scope than in the past to respond to economic weakness by easing policy.
The Fed's goal is to manage the economy to promote maximum employment and stable prices, which it defines as inflation rising at an annual rate of 2 percent. She said officials still believe this is being caused by temporary factors such as a price war among cellphone companies but that the Fed needs to monitor inflation carefully.
Many Federal Reserve policymakers expect that interest rates will have to be raised in the "near term", according to the minutes of the United States central bank's last policy meeting released on Wednesday. She called this "surprising" since the country is essentially at full employment, with the jobless rate falling in October to 4.1 percent, the lowest level in almost 17 years.
Since the last meeting, the Consumer Price Index showed a modest uptick in a closely watched measure of inflation but economists have said more data may be needed to determine whether this points to a firming trend.
Yellen will likely expand further on her views when she testifies next Wednesday on the economy before the congressional Joint Economic Committee.
Yellen's appearance sponsored by NYU's Stern School of Business came one day after she submitted a resignation letter to President Donald Trump, saying she will leave the central bank's board when Jerome Powell is confirmed as her successor as Fed chairman.
She said all the administration officials she met with during her four years as Fed chair understood the importance of the Fed's independence.