Janet Yellen: Market turmoil and dollar could hurt economy

janet yellen fed rate hike

Federal Reserve Chair Janet Yellen sees warning signs ahead for the U.S. economy.

In prepared remarks to be delivered as part of her two-day testimony before Congress starting Wednesday, Yellen acknowledged that there were several risks to U.S. economic growth — cost of borrowing was rising, stock prices have declined a lot in the first few weeks of the year and the dollar continues to strengthen against its global counterparts.

“These developments, if they prove persistent, could weigh on the outlook for economic activity an the labor market,” Yellen said.

These concerns will likely play a role on the Fed’s decision to raise rates this year.

Yellen reiterated that the Fed expects to have “gradual” interest rate increases. The Fed’s committee meets next in mid-March. Many on Wall Street think a rate hike is unlikely.

Yellen noted the gains in the job market — unemployment is a healthy 4.9% — and that consumer spending remained steady. She also repeated her view that low oil prices could help consumer spending.

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