Yellen sounds upbeat on economy and inflation prospects

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WASHINGTON (AP) - Federal Reserve Chair Janet Yellen is sketching a bright outlook for the U.S. economy and for inflation prospects in coming months. She says the impact of the recent devastating hurricanes will likely reduce economic growth slightly but only temporarily and should be followed by a rebound by year's end.

Yellen tells an international banking seminar that the persistence of undesirably low inflation this year has been a surprise. She expects inflation to start picking up as the effects of temporary factors, such as falling prices for consumer cellphone service, begin to fade.

The Fed chair's comments suggest that the central bank will soon resume raising interest rates to reflect the strengthening economy. Most economists foresee the next rate hike - the third this year - coming in December.

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