That has translated to historically low borrowing rates for consumers and businesses. Officials still expect to start raising the Fed’s benchmark interest rate later this year, provided the economy grows in line with their expectations.

Yields on German Bunds fell almost 7 basis points to 0.78 per cent. Steady to higher United States and European equity prices offset the drop in some Asian and emerging market stocks despite better-than-expected Chinese economic data.

Senator Sherrod Brown, the ranking Democrat, on the other hand said in remarks that “there are real risks in tightening monetary policy too soon, because, although the economy has made progress since the crisis, we still have a ways to go”.

Yellen noted a number of areas that had improved.

The unemployment rate for African-Americans was 9.5 percent in June, almost twice the rate of 5.3 percent in the population overall. But she said problems with the labor market remained, including anemic wage growth.

Numerous problems that sent the economy into reverse in the January-March quarter appeared to be waning, she said.

Still, “looking forward, prospects are favorable for further improvement in the US labor market and the economy more broadly”.

‘It should improve the competitiveness of the Australian companies versus imports and on the export market, ‘ he said.

Yellen listed foreign developments as key uncertainties that could weigh on US growth.

Ms. Yellen, 68, again emphasized that the timing of the first rate rise in nearly a decade is less important than the subsequent path of increases, which she said would be gradual.

Yellen faced a particularly sharp rebuke from a Republican lawmaker unhappy over the Fed’s refusal to hand over documents subpoenaed by the committee.

Rep. Jeb Hensarling, R-Texas, chairman of the Financial Services Committee, is pursuing an investigation of a 2012 leak of confidential information about the Fed’s bond-buying plans.

House members were critical of the Fed at her previous appearance before them in February.

The Canadian dollar remained on the defensive and hovered near a six-year low set on Wednesday, after the Bank of Canada cut its interest rate for a second time this year.

With Germany likely to approve the bailout today, negotiations on the terms of the bailout can begin, including the issue of debt relief which the worldwide Monetary Fund is insisting on in exchange for it being involved. USA stock prices held steady, while the dollar rose 0.6 per cent against a basket of currencies, pressuring gold, which is priced in the US dollar.

Jim O’Sullivan of High Frequency Economics also thinks the Fed is moving too slowly.

Industrial production in June, meanwhile, rose by a better-than-expected 0.3%.