Yellen tells Congress to expect more rate hikes

WASHINGTON (AP) - Federal Reserve Chair Janet Yellen is telling Congress that the central bank expects to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year.

In her semiannual testimony on the economy, Yellen takes note of a number of encouraging factors, including strong job gains and rising household wealth that she said should fuel economic growth over the next two years.

She blames a recent slowdown in inflation on temporary factors. But she says Fed officials are watching developments closely to make sure that annual price gains move back toward the Fed's 2 percent target.

Many economists believe the Fed, which has raised rates three times since December, will hike rates one more time this year.