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Federal Reserve Chair Janet Yellen defended the system's seven-year period of low interest rates and noted expectations of a gradual rate rise in a response to Ralph Nader's accusation that the Fed favors banks over consumers, The Wall Street Journal reported.

Nader, in a letter from the "Savers of America," argued that big banks were able to borrow money "for virtually no interest" while consumers received "virtually no income for our hard-earned savings."

Yellen argued that consumers would have been worse off with higher interest rates, WSJ reported, with higher unemployment, lower home prices, more business bankruptcies and home foreclosures and no stock-market recovery. "True, savers could have seen higher returns on their federally-insured deposits, but these returns would hardly have offset more dramatic declines they would have experienced in the value of their homes and retirement accounts."

Yellen said that if, as she expects, the labor market improves and inflation moves toward the Fed's 2 percent goal, the Fed will raise rates. "Most of us expect the pace of that normalization to be gradual," she wrote.

The Federal Open Market Committee is expected to increase the federal funds target rate at its December 15-16 meeting. The range has been set at 0 to 0.25 percent since 2008.

In related news, a study from the New York Federal Reserve Bank predicts a short-term 1 percent rate increase that could cause vehicle production and sales to decrease. While the study is predicated on a surprise rate hike, NAFCU Chief Economist and Director of Research Curt Long pointed to recent forecasts from the FOMC, which suggest that it is targeting a similar-sized increase to the federal funds rate next year. "Barring a sudden accumulation of inflationary pressures," Long said, "it appears that the committee is looking at four quarter-point rate increases in 2016," he said.