Yellen: Fed will raise rates this year

Federal Reserve Chairwoman Janet Yellen signaled Friday that the central bank will being gradually raising interest rates for the first time since the financial crisis by the end of the year.

Yellen said at a forum hosted by the San Francisco Federal Reserve that she expects “conditions may warrant an increase in the federal funds rate target sometime this year.”

{mosads}“I generally anticipate that a rather gradual rise in the federal funds rate will be appropriate over the next few years,” Yellen said.

Fed policymakers lowered interest rates to zero percent following the 2008 financial crisis in an effort to spur economic growth.

“If conditions do evolve in the manner that most of my [Fed] colleagues and I anticipate, I would expect the level of the federal funds rate to be normalized only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly,” Yellen said.

While Fed officials have ended their economic stimulus spending program known as quantitative easing, they have kept interest rates at zero — despite signs of a recovering economy and unemployment declining to its 5.5 percent rate.

Unemployment was 10 percent in 2009.