US Edition 
Fed must raise rates or face being stuck behind the curve, warns Janet Yellen
The chairman of the US central bank intends to start raising its rates before the end of the year
The Federal Reserve is still on course to raise interest rates this year, as delays could mean the central bank is forced to hike more rapidly than it is safe later, its chairman has said.
Janet Yellen indicated that delaying increases in interest rates would mean that the central bank could "have to do so more rapidly" if caught behind the curve.
In her testimony before the Senate Committee on Banking on Wednesday, she said that if the economy progresses as expected, "economic conditions would make it appropriate at some point this year to raise" the Fed's key interest rate.
“An advantage to beginning a little bit earlier is that we might have a more gradual path of rate increases,” Ms Yellen said. Capital Economics now expects that the Fed will raise its rates from their current 0-0.25pc range to close to 3pc by the end of next year.
Ms Yellen added: "Looking forward, prospects are favorable for further improvement in the US labour market and the economy more broadly."
She sought to emphasise that the Fed would remain "data dependent", and reminded US polticians that the central bank's forecasts are "based on the anticipated path of the economy, not statements of intent to raise rates at any particular time".
Central bank watchers expect the Federal Reserve's rates to rise in September
Heightened international risks such as the current Greek debt crisis has not changed the Fed's course, said David Page, an economist at AXA Investment Managers.
Ms Yellen said: "The situation in Greece remains difficult. And China continues to grapple with the challenges posed by high debt, weak property markets and volatile financial conditions."
Mr Page said that the central bank would most likely start to raise its rates in September, but that it is not expect to clearly signal this until closer to that date.
The Fed chairman remarked that "economic growth abroad could also pick up more quickly than observers generally anticipate, providing additional support for US economic activity".