Fed Chairwoman Janet Yellen said in a speech to the Economic Club of New York on Tuesday that the Fed would hike its interest rate gradually. She did not mention the timing of possible interest rate hikes.

Yellen noted that the Fed should be cautious in hiking rates as risks from global economic and financial developments rose since December.

"Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy," Fed chairwoman said.

Yellen pointed out that the Fed could cut its interest rate if needed.

"If the expansion was to falter or if inflation was to remain stubbornly low, the FOMC would be able to provide only a modest degree of additional stimulus by cutting the federal funds rate back to near zero," she noted.