"Of course the economic outlook is highly uncertain," Yellen told reporters Wednesday. "Changes in fiscal policy or other economic policies could potentially affect the economic outlook."
The central bank chief said Federal Reserve staff members have been in contact with Trump’s transition team.
"We of course share the objective…to work constructively to ensure a smooth transition," she added.
The central bank’s policy-setting Federal Open Market Committee (FOMC) members recognize there is "considerable uncertainty" about how Trump administration economic policies could affect the economy, Yellen explained.
"We are operating under a cloud of uncertainty at the moment, and we have time to wait to see what changes occur and to factor those into our decision-making as we gain greater clarity," she said.
Also on Wednesday, the FOMC increased the United States’ benchmark interest rate by 25 basis points to a range of 0.5 percent to 0.75 percent.
The decision by Federal Reserve policymakers to raise the benchmark US interest rate will have a limited impact on domestic companies and households, Yellen added.
"This was a decision that was well anticipated in markets and I think will have a relatively small effect on market rates," Yellen said following the move. "Overall, households and firms will see very modest changes from this decision."
"Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made and our judgment that that progress will continue and the economy has proven to be remarkably resilient," she said.
The chairman pointed out, however, that the rate increase could boost "very slightly some short-term interest rates that could have an effect on borrowing costs that are linked to them."
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