The Federal Reserve is expected to increase the interest rate in 2015, which would be the first rate hike from near zero since the 2008 economic crisis, said chairwoman Janet Yellen.

Yellen added that if the US economy continues to strengthen, “it will be appropriate at some point this year to take the initial step to raise the federal funds rate”.
However, she cautioned the market not to expect any rapid increase in rates. “After we begin raising the federal funds rate, I anticipate that the pace of normalisation is likely to be gradual,” she said in a speech in Rhode Island on Friday.

“The various headwinds that are still restraining the economy, as I said, will likely take some time to fully abate, and the pace of that improvement is highly uncertain. 

“We have no intention of embarking on a pre-set course of increases in the federal funds rate after the initial increase,” she added.