The Latest: Yellen says timing could affect pace of hikes
WASHINGTON (AP) — The latest on Federal Reserve Chair Janet Yellen's mid-year economic outlook and testimony to Congress (all times local):
Federal Reserve Chair Janet Yellen says that if the central bank waits until 2016 to begin raising rates, it could mean that subsequent hikes might occur more rapidly.
Yellen's remarks came in response to a question from Rep. Carolyn Maloney, D-New York. Yellen stresses that a number of factors would determine how fast the Fed will raise rates. The expectation now is that once started, rate increases will likely be gradual, which would mean that rates will remain low for a considerable period.
The Fed has held its key interest rate at a record low near zero for more than six years.
Asked about developments in Greece and China, Yellen says if the Fed felt "these developments did create substantial risks," then they could impact the central bank's decision on raising rates.
Republican and Democratic members of the House Financial Services Committee had clashing views on the economy and the performance of the Federal Reserve during Chair Janet Yellen's appearance Wednesday before Congress.
Committee Chairman Jeb Hensarling, R-Texas, says the U.S. economy remains mired in "lackluster, halting economic growth" and that the Fed has contributed to problems with its flawed policies. He says the economy would be healthier if the Fed followed more predictable rules that govern how it manages interest rates.
But Rep. Maxine Waters of California, the top Democrat on the committee, praises the policies being followed by the Fed, saying they helped to create nearly 13 million private sector jobs. She says the Fed needs to be careful in deciding when to start raising interest rates in order to gauge such a move's impact on the economy.