Yellen says the Fed will need good luck and great skill if it's going to pull off a soft landing for the US economy

It will take skill and luck to get the Federal Reserve to achieve a soft landing.

"The Fed is going to need a lot of skill and good luck to achieve what we sometimes call a soft landing," she said.

The ideal scenario for the Fed is for inflation to cool down to 2% and unemployment to stay low.

"My hope is that we will achieve a soft landing, but Americans know that it's essential to bring inflation down and that we can't have a strong labor market without inflation under control," she said.

Concerns that the US economy could tip into a recession as the Fed hikes interest rates have been raised. "It's definitely a risk that we're keeping an eye on," she said.

After hitting a 41-year high the month before, inflation cooled through July. According to analysts atDeutsche Bank, they expect a slight decline in the latest data on the US consumer price index.

Leading market voices say that the Fed won't go easy on its monetary policy. The central bank will raise rates to 4%, according to Richard Clarida.

Central bankers are expected to approve another 75-basis-point increase in the fed funds rate at their meeting in September.

The Fed wants to see a strong labor market and lower inflation.

Her optimism over a soft landing is different from the analysts'. They think the Fed won't be able to avoid a recession and won't be able to bring inflation back to 2%.

As the Fed deals with a tough balancing act of reducing inflation while maintaining economic growth, there is a chance of a recession.