Federal Reserve Chairwoman Janet Yellen and her top deputy signaled the central bank is on course to raise short-term interest rates as soon as this month and will seek to pick up the pace as the year wears on.

Boosting the benchmark federal-funds rate at the Fed’s mid-March meeting would signal greater confidence in the global economic backdrop and give officials a chance to space out increases evenly over the course of the year, officials’ long-stated preference, rather than pack them in later in the year.

If inflation and employment data continue to meet the central bank’s expectations, “a further adjustment of the federal-funds rate would likely be appropriate” at this month’s gathering, Ms. Yellen said Friday in Chicago.

Fed officials don’t want to wait too long to move and risk letting the economy overheat, which could require them to raise rates more rapidly later, possibly causing a recession, Ms. Yellen said. She …