Federal Reserve

Yellen: Getting closer to Fed objectives, but still hard to gauge labor market slack

Yellen speech not definitive: Liesman

The economy is getting closer to the Federal Reserve's objectives, Fed Chair Janet Yellen said on Friday.

Stocks, which opened lower on the latest unrest in Ukraine, turned positive on Yellen's comments before giving up all those gains and moving lower again. (Click here for the latest on the markets.)

In prepared remarks for the annual Jackson Hole policy conference, Yellen said the Fed was now questioning both the degree of remaining slack in the labor market and the timing of rate hikes relative to that slack.

Yet Yellen also said it was difficult to gauge the remaining slack in the labor market, and that internal Fed gauges of the labor market suggested the unemployment rate was overstating progress.

"It sounds to me like she's just given herself flexibility," said David Spika, senior vice president of Westwood Funds, in a CNBC interview. "Clearly the Fed wants to have plenty of flexibility to make changes in monetary policy based on economic growth, and specifically wages, and it doesn't sound to me like that's changed."

"We think that the glide path will be one that's measured and gradual and I heard nothing from those comments to make me think otherwise," he added.

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Read MoreFed hawks and doves start to sound more alike

Fed's Plosser: Need to be responsive to data not calendar time

One of the Fed's most outspoken hawks said on Thursday that its current policy on interest rates is too "risky" and could lead to "traumatic" consequences.

"We are running a very risky policy, if you will, given where the stance of the economy is and seems to be going," Charles Plosser, the president of the Federal Reserve Bank of Philadelphia, said in an interview.

Read MoreHigher rates not bad for economy: Bullard

Some members of the Federal Reserve's Open Market Committee want to make a "relatively prompt" rate hike based on the economy's progress, according to the minutes of the committee's last meeting.

But the minutes, released Wednesday, also showed that most members agreed more data was needed to move up the schedule of rate hikes.