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Federal Reserve Chair Janet Yellen testified before the Senate Banking Committee Thursday and said the Fed's plans to raise interest rates will depend on more than just inflation.

"The actual path of the federal funds rate will depend on what incoming data tell us about the economic outlook, and we will regularly reassess what level of the federal funds rate is consistent with achieving and maintaining maximum employment and 2 percent inflation," Yellen said in her testimony. "In doing so, we will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments."

Yellen was asked by Sen. Jon Tester, D-Mont., about the system's efforts to limit the regulatory burden on community banks, to which she responded that they are doing "everything we can to reduce burden." Tester also raised concerns about the increasing number of mergers and consolidation among community banks.

On Wednesday, Yellen testified before the House Financial Services Committee, during which she did not rule out a March rate increase. Yellen gives annual monetary policy reports to both committees twice a year.

On Wednesday both Reps. Gwen Moore, D-Wis., and Rep. Bill Posey, R-Fla., also asked Yellen about the regulatory burden faced by credit unions and community banks. The Fed examines only banking institutions – not credit unions – and she focused on that in her replies.