The Federal Reserve could begin normalizing interest rates this year, but won’t rush to do so amid tepid wage growth and tame inflation, central bank Chairwoman Janet Yellen said on Tuesday.

Testifying before Congress, Yellen sought to lay the groundwork for how the Federal Reserve would begin raising interest rates after more than six years. She continued to stress patience in normalizing monetary policy, echoing the Federal Open Market Committee’s January rate statement.

The Federal Reserve “will at some point begin considering an increase in the target range for the federal funds rate on a meeting-by-meeting basis,” Yellen told Congress on Tuesday. However, Yelllen was careful to manage expectations, stressing that the Fed’s eventual change in language would not necessarily translate into a shift in policy.

“It is important to emphasize that a modification of the forward guidance should not be read as indicating that the [Federal Reserve] will necessarily increase the target rate in a couple of meetings,” she added. “The modification should be understood as reflecting the [Federal Reserve’s] judgment that conditions have improved to the point where it will soon be the case that a change in the target range could be warranted at any meeting,”

The data-driven Fed has relied on the economic indicators to adjust monetary policy, having closed the books on a record bond-buying program only last October. Yellen said on Tuesday that unemployment was still too high, despite acknowledging broad improvements “on many dimensions.” Unemployment edged up slightly to 5.7 percent in January as workforce participation increased. Employers added 257,000 jobs in January and have added an average of 336,000 jobs per month over the last three months.

While several Fed officials have indicated they would like to have the option to raise interest rates in June, the minutes of the January FOMC meetings revealed growing concerns about tame inflation and a volatile global economy. For its part, the Fed has remained consistent in its messaging since December, when it first started using the word patience to describe interest rate adjustments.

The FOMC’s next meetings will be held in Washington on March 17-18. They will be accompanied by revised GDP, inflation and employment forecasts, as well as the closely followed “dot-plot” chart of interest rate expectations. The Fed’s December forecast showed policymakers anticipated interest rates to rise to 1.125 percent by the end of the year.

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The euro was trading cautiously on Monday, following a week of uncertainty that ended with Greece securing a short-term loan extension in exchange for further oversight from its creditors and other reforms that squashed Athens’ “anti-austerity” pledge. The attention this week shifts back to the economic data, although the threat of an eventual Greek exit from the Eurozone remains in the background.

The EUR/USD was trading at 1.1368 in the early Asian session, down 0.13 percent. The pair faces initial support at 1.1294 and resistance at 1.1445. The euro advanced slightly against its US counterpart last week, but ended on a sour note following the details of the Greek loan extension. The pair briefly fell below 1.13 on Friday before recovering.

Several batches of high profile data are on the docket this week, headlined by Germany. On Monday the IFO Institute will release the business climate index, a closely followed indicator for economic development in Germany. The business climate index is forecast to rise to 107.7 from 106.7, adding further evidence the German economy was regaining momentum following a midyear slump.

On Tuesday the Federal Statistics Office is expected to confirm Germany’s Q4 GDP growth at 0.7 percent, unchanged from the preliminary estimate. Year-on-year, this translates into an annualized gain of 1.6 percent. Fourth quarter growth more than doubled forecast and was a significant improvement over the third quarter’s 0.1 percent uptick.

Separately, Eurostat will post final Eurozone CPI figures for January. Eurozone consumer prices plunged 0.6 percent annually in January, the sharpest decline since July 2009, Eurostat reported last month in a preliminary estimate.

On Thursday Germany will publish official employment figures for February. The number of workers unemployed is forecast to drop by another 10,000 in February. The unemployment rate is forecast to hold at 6.5 percent.

Separately, Eurostat will release several economic indicators on Thursday, including business confidence, industrial confidence and economic sentiment.

Germany and other Eurozone member states will close out the week with preliminary estimates of February CPI. Germany’s harmonized index of consumer prices declined 0.5 percent in January, the first time in more than five years inflation turned negative for Europe’s largest economy.

Eurozone inflation will probably remain negative in the first half of the year before gradually recovering later on, aggravating concerns about the currency bloc’s nascent recovery. Persistently weak inflation also raises concerns about the ECB’s €1 trillion bond buying program, which has designed to shore up consumer prices and promote economic growth.

The ECB will hold its next monetary policy meetings in early March.

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MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.