Yellen spoke with the Senate Banking Committee on her semi-annual monetary policy report to lawmakers.
"I think fiscal policy ... uncertainty is quite high at the moment," she said, referring to policies that Congress and the White House control.
She also said a potential revamp of the U.S. health-care system is one factor causing uncertainty in the economic outlook.
"Spending on health care is an important aspect of household budgets, and changes there could have an effect on spending on a wide range of goods and services in the economy. And access to health care is important," Yellen told the Senate Banking Committee.
Senate Republicans are expected to unveil a new version of their legislation to repeal and replace Obamacare on Thursday. The House of Representatives passed a health-care overhaul bill in May.
Several Senate Republicans said they were waiting to see the revised legislation before deciding whether to back it, and Democrats are united on scrapping it.
On Monday, President Donald Trump said he did not expect Senate Republicans to leave for summer recess without approving the bill. Majority Leader Mitch McConnell said Tuesday the Senate will delay its upcoming break until the third week of August.