Federal Reserve Chair Janet Yellen conceded Tuesday that inflation may be weaker than Fed officials have anticipated, a development that could lead to a more gradual rise in interest rates.

While several Fed policymakers have raised that possibility, Yellen’s remarks represent her most detailed and explicit acknowledgment that the Fed may have been too confident in its long-held view that inflation will soon pick up and move toward the Fed’s annual 2% target.

“My colleagues and I may have misjudged the strength of the labor market, the degree to which longer-run inflation expectations are consistent with our inflation objective, or even the fundamental forces driving inflation,” Yellen said in prepared remarks at a meeting of the National Association for Business Economics in Cleveland. She added that “downward pressures on inflation could prove to be unexpectedly persistent.”

More:Economists see slower growth for U.S. than Trump does

More:Consumer confidence takes a hit from hurricanes

If inflation remained sluggish, that “would naturally result in a policy path that is somewhat easier than that now anticipated.”

Yellen said several forces could be suppressing inflation, including a labor market that may not be as tight as it appears; weak long-running inflation expectations by investors, employers and consumers; and factors such as discounted online shopping.

The Fed has raised its benchmark short-term interest rate three times since December to a range of 1% to1¼%. Last week, it maintained its forecast of three quarter-point rate hikes next year but cut its projection from three to two increases in 2019, lifting the rate to 2.9% by 2020.

The Fed’s preferred measure of inflation fell to 1.4% in July from nearly 2% early this year. Yellen said the Fed’s baseline outlook still calls for an acceleration and blamed the recent retreat on a drop in wireless service prices due to the rollout of unlimited data plans, among other temporary factors. But she also gave more weight to the view that wages and prices could continue to edge up slowly because of longer-term obstacles.

For example, although unemployment is at a low 4.4%, the share of Americans ages 25 to 54 who are working remains low and the portion of part-time workers who prefer full-time jobs is still above the prerecession levels, Yellen said. That could mean there’s more “slack” in the labor market, providing employers a shadow labor force that’s keeping wage growth contained.

And while Yellen acknowledged that several indicators have revealed tepid pay increases, she traced the development to meager gains in productivity, or worker output, that have curtailed profit margins. She added that the share of firms planning wage increases “has moved back up to its pre-recession level” and many employers are having trouble finding qualified workers — “possible harbingers of stronger wage gains to come.”

Yellen also said some measures of inflation expectations, such as a survey of consumers by the New York Fed, have been unusually low. Inflation expectations help determine actual wage and price increases because workers are less likely to ask for raises, for example, if they expect inflation to remain anemic.

Finally, Yellen said other longer-term trends could be suppressing inflation. Those include subdued growth in health care prices; the integration of China and other emerging markets into the global economy, which restrains both wages and prices; and the spread of low-price online shopping.

The risk that inflation stays low “strengthens the case for a gradual” increase in the Fed’s key short-term interest rate, Yellen said. If the rate rises too quickly, disrupting the recovery, the Fed “will have only limited scope” to cut the still-low rate “should the economy be hit with an adverse shock.”

At the same time, she said the Fed “should also be wary of moving too gradually.”

“Without further modest increases in the federal funds rate over time, there is a risk that the labor market could eventually become overheated, potentially creating inflationary problems down the road that might be difficult to overcome without triggering a recession,” Yellen said.