Her remarks seemed to ease some fresh worries about the economy while also underscoring views the Fed may be in no rush to raise rates.
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The Fed next meets on 14-15 June.
Yellen called the jobs report “disappointing”, but said “one should not attach too much significance to a single report”.
“The employment report didn’t derail the Fed’s desire to raise rates later this year, but given the volatility observed in the data recently, the path is still expected to be very gradual”, said Royce Mendes, director and senior economist at CIBC Capital Markets in Toronto.
The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.285 percent, down from 0.340 percent last week. Canadian dollar-implied volatility, which traders use to price options on the currency, has dropped after much weaker-than-expected USA employment data on Friday lowered the chances of a Fed rate hike. “Other timely indicators from the labor market have been more positive”, Yellen said.
“I see good reasons to expect that the positive forces supporting employment growth and higher inflation will continue to outweigh the negative ones”, she said. On rates, she could repeat her line from a week-and-a-half ago that a rise could be appropriate “probably in the coming months”.
Some economists have warned that a Brexit could adversely impact the U.S. economy. British pound fell to a one-week low on Monday, hurt by a poll showing support for those who want Britain to leave the European Union is rising, adding to growing uncertainty about the June 23 membership referendum.
Ms Yellen’s remarks echo comments from other economists about the impact of a Brexit on the U.S. economy. “The market reaction is very small with curve taking back part of Friday’s move”.
“Because worldwide financial markets are tightly linked, an adverse reaction in European financial markets could affect USA financial markets, and, through them, real activity in the United States”, Ms Brainard said.
The Australian dollar edged higher against USA dollar on Monday following rise in oil prices and on growing doubts about Federal Reserve’s raising rates in the coming days.
But the Fed chair has also previously called on the Fed’s rate-setting Open Market Committee to “proceed cautiously” with any rate rise given the impact it could have on both the USA and global markets.
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The chances of a rate hike at that meeting were all but killed by a report showing the US economy added only 38,000 jobs in May, muting recently upbeat data on consumer spending and overall growth. Consumer spending, core inflation and housing prices all had reported increases.
