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Yellen: We don't need a spending binge to reach full employment

The labor market has improved enough that the United States will not need big U.S. government spending to reach full employment, Fed Chair Janet Yellen said Wednesday.

"I would judge that the degree of slack has diminished. I would say at this point that fiscal policy is not, obviously, needed to help us get up to full employment," the central bank chief told reporters after the Fed hiked interest rates.

The U.S. unemployment rate fell to 4.6 percent in November. Yellen noted that her predecessor at the Fed, Ben Bernanke, called for fiscal stimulus when "unemployment was much higher than it is now."

President-elect Donald Trump has called for infrastructure spending to boost the U.S. economy, a plan some conservatives in Congress have expressed misgivings about.

The Fed on Wednesday raised its federal funds rate target by 0.25 percent percent to a range of 0.5 percent to 0.75 percent. The increase was only the central bank's second in a decade.

The Fed also took a more aggressive view on future hikes. It now projects three increases in 2017, two or three in 2018 and three in 2019.

— CNBC's Jeff Cox contributed to this report