Federal Reserve chair Janet Yellen said that while the U.S. central bank still plans to gradually raise interest rates over the course of this year, global economic uncertainty could derail the multiple rate hikes previously forecast for 2016.
In remarks prepared for the Fed chair’s two days of scheduled Congressional testimony this week, Yellen indicated that uncertainty over China’s faltering economy had “exacerbated concerns about the outlook for global [economic] growth” and had contributed to collapsing prices for commodities like oil.
Yellen remained open to the possibility of a March interest rate hike, according to Bloomberg. The central bank raised rates in December for the first time in nearly a decade amid signs of sustained economic growth, but global volatility has since dampened the Fed’s outlook.
“Financial conditions in the United States have recently bcome less supportive of growth,” Yellen said in her prepared testimony for the House Financial Services Committee in Washington, D.C. “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.” [Bloomberg] – Rey Mashayekhi