The Federal Reserve may have to raise interest rates sooner and higher than expected if the labor market keeps surprising the central bank

WASHINGTON (MarketWatch) — The Federal Reserve may have to raise interest rates sooner and higher than expected if the labor market keeps surprising the central bank, Chairwoman Janet Yellen said Tuesday.

In testimony to the Senate Banking Committee, Yellen stressed, as she has since the spring, that “considerable uncertainty” surrounds the economic outlook and the Fed’s decisions about interest rates will depend on the data.

“If the labor market continues to improve more quickly than anticipated by the Federal Open Market Committee, resulting in faster convergence toward our dual objectives, then increases in the federal funds rate target likely would occur sooner and be more rapid than currently envisioned,” Yellen said. in testimony accompanying the semi-annual monetary policy report

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