NEW YORK (TheStreet) -- In comments released before her speech on Capitol Hill Thursday, Federal Reserve Chair Janet Yellen said a hike in interest rates could come "relatively soon." For most of 2016, it had been speculated that the Fed would raise rates in December, but the uncertainty surrounding the policies of President-elect Donald Trump had called that speculation into question after the election.
While a rate hike could be coming soon, Yellen cautioned that any future moves will come at a slow pace.
"Gradual increases in the federal funds rate will likely be sufficient to get to a neutral policy stance over the next few years," Yellen said.
Anchors David Westin and Jonathan Ferro on BloombergTV's "Bloomberg Daybreak: Americas" were joined by Morgan Stanley's Dan Skelly, who discussed Yellen's upcoming testimony and her future under a Trump administration. The president-elect has been critical of Yellen, suggesting that her policy decisions were politically motivated.
"I think that it's likely that she ends up finishing out her term," Skelly said. "But getting back to the rate hike cycle, I think the major difference this time around is the guidance related to the future path of rate hikes. So along with saying that there could be a hike soon, she also caveated that the future path of hikes is going to be gradual [and] that's different from last year."
The Fed raised rates in December of 2015 and then guided for four additional increases, which did not happen.
"There are a lot of unknowns right now," Skelly said in reference to a question asked about how much of the election the Fed needs to take into consideration in a rate hike decision.
"There are a lot of different variables out there. Key to the Fed's thinking though is getting back to the data and that's what you're going to hear from Janet Yellen, really throughout the rest of the day and later on. They are going to keep focusing on jobs, wage growth and inflation."
Fed Chair Yellen speaks at 10 a.m. Eastern Time in Washington D.C.