The US Federal Reserve is unlikely to reverse its plan to raise interest rates further this year, its chairwoman, Janet Yellen, told US lawmakers Wednesday.
She acknowledged that tighter credit markets, volatile financial markets and uncertainty over Chinese economic growth have raised risks to the US economy, Reuters reported.
“I don’t expect the [Federal Open Market Committee] is going to be soon in the situation where it is necessary to cut rates,” Yellen said.
“There is always a risk of a recession … and global financial developments could produce a slowing in the economy.”
Yellen said she expects continued US economic growth to allow the Fed to pursue its plan of “gradual” rate hikes, but her comments kept the central bank’s options open.
Investors have all but ruled out further interest rate rises this year, after the Fed raised its fed funds rate for the first time in a decade in December.
The US dollar fell to a 15-month low against the yen as investors backed away from earlier expectations that the Fed would continue to raise interest rates.
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