In prepared testimony to be delivered to the Joint Economic Committee of Congress, Yellen said the increase in FFR should be done as long as no further evidence related to the progress of the US economy.
Yellen's comments are encouraging the strengthening of the US dollar against the yen and euro. Analysts also reinforce expectations that the Fed will raise the FFR at the next FOMC meeting scheduled on 13 and 14 December 2016.
"The US dollar enjoyed a strengthening in line with hawkish comments Janet Yellen related to expectations of a rise (FFR) in December," said analyst Joshua Mahony of the IG, as quoted by Channel News Asia on Friday (18/11/2016).
Market analyst at CMC Markets Jasper Lawler said some US economic data make the Fed feel comfortable to adjust its monetary policy through the interest rate channel.
Such data include the unemployment rate, which reached its lowest level since 1973 and the numbers properties rose 25.5 percent, the highest level in nine years.
The US dollar rallied since Donald Trump surprisingly won the US presidential election last week.
During the campaign, Trump pledged to push for infrastructure spending and tax cuts, two policies that believed would spur inflation and FFR will follow.
Higher interest rates will prompt investors to transfer funds to the US from places continued low interest rates, such as Europe and Japan.