Yellen Flags Risks to Economic Outlook That Could Delay Rate Increases

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Wednesday, February 10, 2016 3:42 PM / WSJ

Federal Reserve Chairwoman Janet Yellen flagged risks to the economic outlook that could delay the central bank's plans for raising short-term interest rates, in prepared remarks for her semiannual testimony to Congress on U.S. monetary policy.

Financial conditions have become less supportive of economic growth, stresses in China and other foreign economies could weigh further on the U.S., and market expectations for inflation are sinking, Ms. Yellen said, kicking off two days of testimony before House and Senate committees.

Without explicitly pointing to the prospect of delayed rate increases, her recitation of these risks gave her comments a downbeat undertone.

That in turn underscored the Fed's cautiousness about following through with additional short-term interest-rate increases after pushing them up in December.

Before that move, the Fed had kept rates near zero for seven years.


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