Federal Reserve Chair Janet Yellen expressed concerns about the U.S. economy but did not rule out a rate hike this year. Bobbi Rebell reports.
Fed Chair Janet Yellen still believes the U.S. economy remains solid despite a number of headwinds. The head of the U.S. central bank testified before the House Financial Services Committee Wednesday. While she acknowledged risks, such as the falling stock market and weak global economies, she focused on staying the course of raising interest rates at a gradual pace, though not on a preset course. SOUNDBITE: U.S. FEDERAL RESERVE CHAIR JANET YELLEN (ENGLISH) SAYING: "The Committee expects that with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace in coming years and that labor market indicators will continue to strengthen." Yellen said labor force participation is somewhat depressed, meaning many eligible workers remain on the sidelines. But added that she expects wage growth to increase somewhat. Bob Brusca of Fact and Opinion Economics says, she is in denial about the risks of rate hikes when global central banks are moving in the other direction. SOUNDBITE: BOB BRUSCA, CHIEF ECONOMIST, FACT AND OPINION ECONOMICS (ENGLISH) SAYING: "With everybody else cutting rates, the Fed raising rates. Rate hikes make the dollar stronger, a stronger dollar makes the economy weaker, makes inflation lower, which pushes the Fed away from its objective. It doesn't make any sense to me actually." Yellen will testify before Congress again on Thursday- this time before the Senate banking committee.