Speaking in New York, Yellen said, "the larger the shortfall of employ mentor inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained."
Since 2008 the federal funds interest rate has been maintained at historically low levels of between 0 to 0.25 per cent. The Fed's inflation target is 2 per cent. The US consumer price index rose 1.5 per cent in the last year.
Yellen said the current unemployment US figure of 6.7 percent is more than a percentage point higher than the 5.2 or 5.6 per cent rate the Fed had envisaged.
She said the Federal Reserve's decisions on the interest rate would "not be based on any one indicator, but that it will take into account a wide range of information on the labour market, inflation, and financial developments."