Federal Reserve Chair Janet Yellen said Friday an interest rate hike is "probably" appropriate in the coming months if economic data improve.

"It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate," she said in response to a question at Harvard's Radcliffe Institute for Advanced Study. Her remarks comes as colleagues on the Fed's policymaking committee have pointed to an increase in the federal funds rate target sooner rather than later. Yellen has expressed caution this year on rates, as inflation lags below the Fed's 2 percent target and global risks persist.

Federal Reserve Chair Janet Yellen speaks at the Radcliffe Institute for Advanced Studies at Harvard University in Cambridge, Massachusetts, U.S. May 27, 2016. Brian Snyder | Reuters

"The economy is continuing to improve," Yellen said, adding that she sees growth picking up after a sluggish first quarter. Yellen added that oil prices and the dollar are "roughly stabilizing," which would help to push inflation toward the Fed's goal. The Fed's policymaking committee meets on June 14 and 15. Markets priced in a roughly 28 percent chance of a hike in June and 57 percent in July before Yellen spoke, according to the CME Group. Those chances rose to 34 and 62 percent for June and July, respectively, after her comments.

The Federal Open Market Committee's April meeting minutes released this month showed most policymakers would support a hike in June if economic data improved as expected.