"Any adjustments to the regulatory framework should be modest and preserve the increase in resilience at large dealers and banks associated with the reforms put in place in recent years", Yellen added.
While Yellen did not dwell heavily on monetary policy during her speech at the Jackson Hole conference, she did offer a defense of post-financial crisis bank regulations.
The administration blames such regulations for stifling economic growth.
Mario Draghi, president of the European Central Bank, said Friday that the global economy is strengthening but warned that countries must work together to resist a growing backlash against open trade. Some investors had expected him to send some signal about when the ECB will begin slowing its monthly bond purchases, which have been meant to keep borrowing rates low but are less needed now that the European economy is improving.
Although the uncertainty surrounding monetary policy and US politics has many traders sitting on the sidelines to end the week, there was still plenty of fresh economic data to go around.
They had been hoping she might give a signal on when the Fed next plans to raise interest rates or on when it plans to start unwinding its $1tn worth of asset purchases - Quantitative Easing in the jargon - carried out since the crisis.
US House Speaker Paul Ryan Addresses Violence in Charlottesville
The president said going that route "could have been so easy" but that McConnell and Ryan did not pursue it. Trump vowed to keep American troops fighting in Afghanistan, despite his earlier inclination to withdraw.
The Bloomberg Dollar Spot Index dropped to its lowest since January 2015 after Draghi's remarks, before mildly paring losses.
While there was some contradictory evidence as to whether the reforms were hindering economic activity, she pointed to assessments which found "sizable net benefits to economic growth from higher capital standards".
"A turn towards protectionism would pose a serious risk for continued productivity growth and potential growth in the global economy", Draghi said.
On Friday, Yellen defended Dodd-Frank, which among other things set up a mechanism to dismantle troubled banks during a crisis and required banks to draw up "living wills" that spell out how they would deal with bankruptcy. In other news, investors watched developments in the Gulf Coast after Hurricane Harvey was upgraded to a Category 3 storm. Memories of the last crisis "may be fading", she warned.
The dollar index, which tracks the USA currency against a basket of six other major currencies, gained 0.08 per cent to 93.22 after falling 0.4 per cent on Wednesday. The greenback is seen finding support around the 108.00 mark.
With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary.