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Federal Reserve Chair Janet Yellen speaks during a news conference at the end of the Federal Open Market Committee meeting, Wednesday, March 18, 2015, in Washington. The Federal Reserve signaled Wednesday that it needs to see further improvement in the job market and higher inflation before it raises interest rates from record lows. (AP Photo/Kevin Wolf)

Yellen: A rate increase may be warranted later this year

WASHINGTON — Federal Reserve Chair Janet Yellen says continued improvement in the U.S. economy means an increase in the Fed’s key interest rate could come later this year.

But Yellen stresses that any rate increases would likely be very gradual.

The Fed has kept its benchmark rate at a record low near zero for more than six years. Yellen says in a speech in San Francisco that the time to start raising the rate could occur “sometime this year,” though she says that time hasn’t yet arrived.

She says that when the Fed does start raising rates, policymakers expect the increases to be “rather gradual” over the next few years. She says the experience of Japan over the past 20 years argues for a cautious approach.