U.S. economy on steady growth track: Yellen

The Federal Reserve is on track to raise interest rates later this year, as most Fed officials expect the economy to continue to gain growth momentum over the remainder of this year, said Fed chairwoman Janet Yellen on Wednesday.

In her semiannual monetary policy report to Congress, Yellen said the Federal Open Market Committee, the monetary policymaking body, expects the economy to strengthen over the remainder of this year and the unemployment rate to decline gradually.

Low oil prices and ongoing employment gains should continue to bolster consumer spending, while financial conditions generally remain supportive of growth. In addition, the highly accommodative monetary policies in other countries should work to strengthen global growth, she said.

Those factors would support the U.S. economy to continue expansion, said Yellen.

In the first quarter of this year, the U.S. economy contracted 0.2 percent due to some transitory factors, such as harsh winter weather, West coast labor dispute, and strong dollar.

Yellen said some of the headwinds restraining economic growth, including the negative effects of U.S. dollar appreciation on net imports and low energy prices on oil drilling industry investment, would diminish over time.

In her report, she reiterated the U.S. central bank expects an interest rate hike would likely become appropriate before year-end if the economy continues to strengthen.

Yellen also defended the Fed's transparency and accountability in her report, saying that the central bank's flow of information to financial markets and its press conference and audit schedules are the evidence proving that it does not need further congressional oversight.

Yellen's remarks came as lawmakers in Congress are considering legislation that could open the Fed up to more congressional scrutiny. Endi