The Fed this week scrapped its guidance that its benchmark rate won’t rise at least as long as unemployment is above 6.5 percent, so long as inflation expectations don’t exceed 2.5 percent. Instead, the Fed will look at a “wide range of information” on the labor market, inflation and financial markets, Yellen said.

Asset Purchases

The Fed also announced its third straight $10 billion reduction in the monthly pace of asset purchases, to $55 billion. The central bank has signaled it will continue to taper at the same pace, meaning the end of the program would be announced in October or December.

Yellen’s timetable for the first interest-rate increase accords with Fed’s plans to continue tapering bond purchases in “further measured steps,” as well as policy makers’ current economic forecasts.

What actually happens with the Fed’s interest rate outlook “will depend on how the data unfolds,” said Mark Gertler, a New York University economist who has co-authored research with former Fed Chairman Ben S. Bernanke. “Incoming data could affect the rate decision. She was not forecasting a drop in inflation, but rather illustrating how new information about the economy could alter the Fed’s plans.”

Food, Energy

A measure of inflation that strips out more volatile food and energy costs increased 1.1 percent in January from a year earlier, the least since March 2011. It has averaged 1.4 percent over the past five years.

“If inflation has not budged by the spring, the Fed might conclude, ‘We’re not in a rush to move,’” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut. “The last thing we want to do is cause inflation to move down. We have two mandates.”

Progress toward the second mandate -- full employment -- will no longer be linked to a specific rate of unemployment. Yellen, in her press conference, elaborated on some of the measures she will be watching.

One is the proportion of people working part-time because they can’t find a full-time job, which she called “an exceptionally high number relative to the measured unemployment rate.”