Roundup: U.S. Fed expects to hike rate later this year as economy strengthens

The U.S. Federal Reserve is on track to raise interest rate later this year, as most Fed officials expect the economy will continue to gain growth momentum over the reminder of this year, according to the Fed chair Janet Yellen on Wednesday.

Yellen on Wednesday delivered optimistic economic outlook remarks to the House Committee on Financial Services and defended the central bank's accountability and transparency amid the attacks from the lawmakers.

In her testimony, Yellen said the Federal Open Market Committee, the monetary policy decision body, expects the economy to strengthen over the reminder of this year and the unemployment rate to decline gradually.

She said that 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.

The U.S. central bank expects an interest rate hike would likely become appropriate before year end if the economy continues to strengthen, she repeated.

When asked about whether foreign developments, such as Greece and China, have affected the Fed's decision on the timing for the first interest rate hike in the testimony, Yellen responded that central bank officials have taken into account these developments and still believed that the overall risk to the U.S. economic outlook was balanced.

She defended there was no set timetable for interest rate hike, saying that "we have no judgment at this point about the appropriate date to raise the federal funds rate." She stressed that the Fed will depend on unfolding economic developments in decide the timing of the first rate hike.

Some lawmakers quoted the International Monetary Fund's suggestion to the Fed on waiting longer to hike rates. Yellen responded that a delayed rate hike could mean that the Fed has to raise rate more rapidly in the monetary policy normalization process. "So an advantage to beginning a little bit earlier is that we might have a more gradual path of rate increases," she said.

Yellen was also under attacks by the lawmakers on the accountability and transparency of the central bank. She said in her testimony that the central bank's flow of information to financial markets and its press conference and audit schedules are evidences that it does not need further congressional oversight.

In the most heated exchanges, Yellen came under fire from the committee on Fed's failure to comply with a subpoena for documents relating to a leak of confidential policy documents in 2012. Yellen said the Fed is seeking to cooperate with the committee but complying with the subpoena will interfere with the ongoing criminal investigations on the policy document leak event. Endite