The US economy and fiscal policy face an uncertain path under the Donald Trump administration, Janet Yellen warned on Tuesday as she declared “monetary policy is not on a preset course” but that it would be “unwise” to raise rates too slowly.

Testifying before Congress, the Federal Reserve chair painted a picture of an economy with accelerating growth, higher inflation and a robust labour market that has generated some 16m jobs since its post-crisis trough in early 2010.

That improving picture, she said, justified the December move by the policy-setting Federal Open Market Committee to raise interest rates for only the second time in the past decade and expectations that it would have to continue to increase its target rate gradually in the months to come.