The Fed expects to raise rates three times this year.
A rise in US interest rates could be “appropriate” as soon as this month, according to the chair of the US Federal Reserve.
Janet Yellen said rate setters will evaluate whether employment and inflation remain in line with expectations when they meet in March.
Ms Yellen also suggested the central bank was likely to raise rates more quickly than over the past two years.
Rates went up by 0.25% in December, only the second increase in a decade.
The benchmark interest rate, the Federal Funds rate, now stands at 0.5%-0.75%.
The Federal Open Market Committee (FOMC), which sets rates, has to ensure that the Federal Reserve achieves its goal of maximum employment and price stability.
Speaking to The Executives’ Club of Chicago, Ms Yellen said the US economy had exhibited “remarkable resilience” in the face of adverse shocks in recent years” with the jobs market strengthening and inflation rising towards target.
She added: “We currently judge that it will be appropriate to gradually increase the Federal Funds rate if the economic data continue to come in about as we expect.