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Federal Reserve Chair Janet Yellen appeared optimistic about economic outlook during her Thursday testimony before the Joint Economic Committee, signaling the likelihood of a federal funds rate target increase this month.

"I currently judge that U.S. economic growth is likely to be sufficient over the next year or two to result in further improvement in the labor market," Yellen said during her testimony. "Ongoing gains in the labor market, coupled with my judgment that longer-term inflation expectations remain reasonably well anchored, serve to bolster my confidence in a return of inflation to 2 percent as the disinflationary effects of declines in energy and import prices wane."

Yellen acknowledged that the weak global economy has been a drag on the U.S. economy, but said that consumer and business spending as well as housing investment, which make up 85 percent of total spending, are "on a solid course." She also stressed that the Fed will consider all of the latest data during its Dec. 15-16 meeting before deciding on a rate increase.

On Wednesday, Yellen also indicated her optimism about employment numbers and price stability during remarks to the Economic Club of Washington.

"The economy has come a long way toward the FOMC's objectives of maximum employment and price stability," Yellen said. "When the committee begins to normalize the stance of policy, doing so will be a testament, also, to how far our economy has come in recovering from the effects of the financial crisis and the Great Recession."

Observers anticipate the committee will raise the benchmark interest rate after its meeting. The range has been set at 0 to 0.25 percent since 2008.