WASHINGTON — Federal Reserve Chair Janet Yellen said Friday that the Fed is striving to clearly communicate its intentions on interest rates in order to minimize surprises that could disrupt financial markets both in the United States and globally.

She said central bank policymakers understand that moving from a period of very low interest rates to more normal levels of interest rates will lead to some heightened volatility in financial markets.

But she says the normalization of rates will be an important sign that economic conditions are “finally emerging from the shadow of the Great Recession.”

Yellen’s comments came in a speech in Paris at a conference sponsored by the Bank of France. The Fed last week ended its bond buying program but its first increase in rates is not expected until mid-2015.

“As employment, economic activity and inflation rates return to normal, monetary policy will eventually need to normalize too, although the speed and timing .of this normalization will likely differ across countries based on differences in the pace of recovery in domestic conditions,” Yellen said.

“For our part, the Federal Reserve will strive to clearly and transparently communicate its monetary policy strategy in order to minimize the likelihood of surprises that could disrupt financial markets, both at home and around the world,” Yellen said.

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She said that among the lessons learned from the crisis is that central banks need to be prepared to employ all available tools including unconventional policies such as bond buying to support economic growth and achieve optimal inflation rates.

Last week, the Fed announced the end of its bond buying program, which had been designed to keep long-term interest rates low, and upgraded its outlook for the U.S. labor market. The massive bond purchases have pushed the Fed’s balance sheet up by more than $3 trillion to nearly $4.5 trillion.

In a statement after a two-day meeting, the Fed reiterated its plan to maintain its benchmark short-term interest rate near zero “for a considerable time.” The Fed statement noted that the job market is strengthening. The statement dropped a previous reference to “significant underutilization” of available workers.

On Friday, the government reported that the unemployment rate dropped to 5.8 percent in October as the economy added another 214,000 jobs.


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