On Thursday, FOMC voters continued to hint a hike may come in the near future. Fed Governor Jerome Powell said an interest rate hike could be appropriate "fairly soon," adding that he supports gradual increases if data underpin forecasts for an improving economy.
Earlier Thursday, St. Louis Fed President James Bullard told reporters he believes markets "read the minutes correctly" when they priced a higher chance of a hike.
Yellen on Friday said the Fed needed to avoid raising rates too quickly, as it could cause a slowdown.
"If we were to raise interest rates too steeply and we were to trigger a downturn or contribute to a downturn, we have limited scope for responding, and it is an important reason for caution," she said.
Aside from her comments on rates, Yellen gave a broader assessment of the U.S. economy. She said it has made "a great deal of progress" in the "slow recovery" since the global financial crisis.
Yellen highlighted improvement in the labor market, saying it has nearly reached a point that most economists would associate with full employment. However, she outlined out some areas of weakness, including wage and productivity growth.
One widely followed market watcher did not think Yellen's comments necessarily meant the Fed will hike in June. DoubleLine Capital's Jeffrey Gundlach said Yellen's remark "doesn't suggest" a hike in June, according to Reuters.