In her testimony, Yellen delivered a message that reflected essentially what the Fed said in its most recent policy statement on 1 February: The economy and job markets have strengthened, and inflation is edging up, closer to the Fed's 2% target. Prices increased by 1.6 percent during 2016, a full percentage point more than in the previous year, although that is still below the Fed's preferred 2 percent annual pace.
The Fed adopted an accommodative monetary policy in the aftermath of 2008 financial crisis and kept interest rates near zero. The funds rate is now targeted in the 0.5 percent to 0.75 percent range.
USA retail sales rose more than expected in January, while other data showed consumer prices recorded their biggest increase in almost four years last month and a rise in manufacturing output.
The Fed hinted on three raises in interest rate during 2017. Retail sales in the USA also advanced more than forecast, suggesting consumers are positioned to buttress economic growth. The chance of a hike-to an interest rate range of between 0.75 and 1 percent, then to a range of 1 and 1.25 percent, and so on-increases as the months pass, with less than 5 percent of investors believing the Fed will have kept rates the same by the central bank's last meeting of 2017, on December 13.
But Yellen said participation with the Financial Stability Board and the Basel Committee on Banking and Supervision, which discuss best practices in banking regulation, is part of the supervisory duties assigned to the Fed by Congress. Prominent asset managers such as Blackrock and Pimco are cautioning that the Fed may end up raising rates faster than investors anticipate.
The average 15-year mortgage rate was unchanged at 3.15%, equating to a $697.82 monthly payment per $100,000 borrowed.
President Donald Trump is supporting an effort by congressional Republicans to overhaul the law. Traders are also squaring positions ahead of Fed Chair Janet Yellen's testimony at 1500 GMT.
Fourth quarter earnings were C$697 million, or C$1.21 per share, compared with a loss of C$459 million or C$0.80 per share in the same period a year ago. She didn't say there's going to be a move on rates next month-the next opportunity for the Fed-but that delaying would mean more rapid rate hikes down the road, which would be more disruptive. Banks led broad gains in global stocks after Janet Yellen said the Federal Reserve doesn't need to wait for the Trump's administration's plans on fiscal stimulus to hike rates.
"It is too early to know how the economic effects of changes in the taxes' policy will unfold", she added.