The case for raising interest rates in the United States has firmed in recent months because of improvements in the labour market and an outlook for faster economic growth, Federal Reserve Chair Janet Yellen said on Friday.

US stocks pared gains after Yellen's comments.

She devoted much of her speech to outlining how the Fed may deal with future recessions.

Analysts say, since Fed's twin goals of employment and inflation are getting close to being achieved, a case can be made for tightening. Yellen has not committed any date, but December will likely see a US rate hike.

However, another school of experts believe it may come as early as September.

Photograph: Jonathan Ernst