Yellen says Fed watching market developments

LONDON — Federal Reserve Chair Janet Yellen says the central bank is carefully watching developments in global financial markets.

She says that while there seem to be increased fears about the possibility of a recession, the Fed has not seen a sharp drop-off in economic growth either in the United States or globally.

In her testimony to the House Financial Services Committee, Yellen stressed the Fed would be prepared to respond to changing economic conditions. Asked if the Fed might consider cutting rates if the economy faltered, Yellen said she did not expect such a move. She stressed the importance of not jumping to "a premature conclusion" about the economy.

She said: "I do not think it is going to be necessary to cut rates, but monetary policy is not on a preset course and if it turned out to be necessary, (Fed policymakers) would do what is necessary to achieve the goals Congress has set for us."

See Thursday's Arkansas Democrat-Gazette for full details.

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