She will appear before the House financial services committee on Wednesday.
Waiting too long to raise interest rates would be "unwise" as economic growth continues and inflation rises, Fed Chair Janet Yellen told Congress on Tuesday.
"Of course, it is too early to know what policy changes will be put in place or how their economic effects will unfold", she said.
Despite reasurances the economy is on stable footing with a labor market nearing full capacity and inflation moving closer to the 2% target, later in the hearing, Yellen called the 1.9% annualized economic growth rate "disappointing". Yields move inversely to prices.
Now that Trump is in office, he likely hopes to bring the Fed's policies more in line with his own, lest they undermine his objectives.
Yellen agreed an executive order from the president calling for a review of the usefulness of current polices and regulations could be helpful.
Beyond Dodd-Frank, Yellen could be pressed about Republican efforts to diminish the Fed's independence, in part by subjecting it to more intensive audits.
Yellen is due to give semi-annual testimony before the Senate Banking Committee on Tuesday at 10 a.m. EST.
A demonstration of how much optimism is feeding into markets: Small-business owners say they haven't felt this encouraged in 12 years, according to a monthly survey released by the National Federation of Independent Business on Tuesday. She said the Fed recognizes that sharp changes in tax policy and government spending could influence the central bank's decisions.
Yellen said the Fed did not increase the rate earlier this month "but reiterated that it expects the evolution of the economy to warrant further gradual increases in the federal funds rate to achieve and maintain its employment and inflation objectives". At the moment, the federal funds rate is in a range of 0.5% to 0.75%.
Thomson Reuters data shows traders see a 17.7 percent chance of a 25-basis-point hike in rates at the Fed's March meeting. Cigna gained 0.8 percent.
Shares of Mattel, Inc.(MAT) rose 0.5% after news that the toy maker will team up with Alibaba (http://www.marketwatch.com/story/mattels-stock-surges-after-alibaba-partnership-2017-02-14) to develop and sell new products for Chinese consumers through Tmall.com.
Stocks have reached new records in recent days afterDonald Trump made vague promises of tax reform.
Worldwide benchmark Brent crude futures fell 0.3 percent LCOc1 to $56.54 per barrel.
"The Trump Trade remains in force, as investors believe the economy and earnings will be improving", said Paul Nolte, portfolio manager at Kingsview Asset Management.
The greenback was initially under pressure following the resignation of President Donald Trump's national security adviser, Michael Flynn, who quit over revelations he had discussed US sanctions against Moscow with the Russian ambassador to the United States before Trump took office.