Yellen: Rate rise probably appropriate in coming months

Federal Reserve Chair Janet Yellen said that given the pace of US economic growth, a Fed decision to increase interest rates could be on the cards soon.

Speaking at Harvard University, Yellen said she believed growth and the strengthening of the labor market would continue, and in that case, "probably in the coming months such a move would be appropriate." That timeframe, which other Fed policymakers have also referred to in recent weeks, would put the Fed's action at its June 14-15 or July 26-27 meeting.

"The economy is continuing to improve," Yellen confirmed.

"Growth looks to be picking up." Yellen's comments sent Wall Street stocks tumbling and the dollar higher.

Since December, when the benchmark federal funds short-term rate was raised for the first time in more than nine years, to 0.25-0.50 percent, the Federal Open Market Committee has demurred from more hikes as the economy went through a rough patch.

Economic growth in the first quarter was a paltry 0.8 percent annual pace, but current official and private sector forecasts point to 2.5-3.0 percent growth for the current quarter.