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                  Yellen: Global Problems May Slow US Economy

   by Jim Randle

   The head of the U.S. central bank says the American economy faces some
   global threats that could hurt growth. Many analysts interpret her
   remarks as a signal that the Federal Reserve is likely to delay further
   interest rate increases.

   In testimony prepared for a congressional hearing Wednesday, Federal
   Reserve Chair Janet Yellen says uncertainty about China's currency
   policies and its economic prospects have contributed to "increased
   volatility in global markets."

   Hard times for commodities exporting countries

   Yellen says worries about growth and a glut of crude oil and other
   commodities on global markets contributed to the recent fall in oil
   prices. She says that could "trigger financial stresses" in the many
   nations that depend on commodity exports.

   Slowing foreign economies, and the very strong U.S. dollar, also hurt
   demand for U.S. exports and crimp economic growth.

   The Fed chief said these factors are likely to ease in the "medium
   term."

   She said the U.S. job market continues to improve and that the overall
   economy is expanding at a "moderate" pace. Yellen said U.S. economic
   growth for the past year is estimated to be 1.75 percent, with
   inflation at just one-half of one percent.

   Delay in rate increases likely

   Back in December, top officials of the Federal Reserve voted to
   increase the key U.S. interest rate from near zero to half of a
   percent. Fed officials are working to raise rates from the emergency
   low levels imposed to bolster the economy during the recession to
   levels consistent with historic averages. At that time, many analysts
   said the Fed would probably raise rates four times this year; but now,
   most economists say the Fed is likely to delay any more rate increases,
   and might not make any this year.

   Low rates help boost economic growth, but if they are held too low too
   long, they might spark inflation that could damage the economy.
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   [1]http://www.voanews.com/content/yellen-global-problems-may-slow-us-ec
   onomy/3184897.html

References

   1. http://www.voanews.com/content/yellen-global-problems-may-slow-us-economy/3184897.html