Yellen tells Congress to expect more rate hikes


WASHINGTON (AP) Federal Reserve Chair Janet Yellen told Congress that the central bank is expected to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year.

In her semiannual testimony on the economy, Yellen took note of a number of encouraging factors, including strong job gains and rising household wealth that she said should fuel economic growth over the next two years.

She blamed a recent slowdown in inflation on temporary factors. But she said Fed officials have watched developments closely to make sure that annual price gains move back toward the Fed’s 2 percent target.

Many economists believe the Fed, which raised rates three times since December, will hike rates one more time this year.