Federal Reserve Chair Janet Yellen remains cautious on raising interest rates, citing risks in China and the oil markets. Bobbi Rebell reports.
Federal Reserve chair Janet Yellen saying the U.S. central bank should proceed cautiously when it comes to raising interest rates. Speaking at the Economic Club of New York, she pointed to concerns about slowing global economic growth and rising economic risks abroad. (SOUNDBITE) JANET YELLEN, CHAIR, U.S. FEDERAL RESERVE (ENGLISH) SAYING: "We are exposed to the direct effects. Slower export growth from slower growth abroad, and, as importantly, the financial market repercussions of slower growth, which tends to mean a stronger dollar, lower equity prices, and so forth, higher risk spreads do have implications for the U.S. outlook." Yellen added that the U.S. economy is "remarkably resilient." U.S, financial markets cheered the remarks, rising during her speech.. which was interpreted as dovish. She also indicated that the Fed is paying attention to the markets- noted Decision Economics Cary Leahey. (SOUNDBITE) CARY LEAHEY, CHIEF U.S. ECONOMIST, DECISION ECONOMICS. (ENGLISH) SAYING: "The fact that Yellen mentioned that the Fed is now following the market rather than the other way around, saying that, well, one of the reasons why the economic statistics have held up so well in the United States is because the market has cushioned the economy by lowering their expectations of the Federal Funds rate for this year, so we lowered our expectations as well. That is pretty astonishing to me." Fed Funds futures now imply traders see a 46 percent chance the Fed will raise rates by a quarter percentage point at the July policy meeting, down from 51 percent on Monday.