Yellen sees ‘gradual’ rate hikes, unclear inflation outlook

NEW YORK, United States - Federal Reserve Chair Janet Yellen expressed confidence in US economic growth Tuesday, and said that central bank would stick to a "gradual" pace of interest rate increases as headwinds diminish.

Yellen also said that, despite some signs of price increases, that it is "too soon to tell" if inflation is picking up.

In her first public remarks since the Federal Reserve took a dovish stance on monetary policy in its February meeting, Yellen reaffirmed a cautiously optimistic outlook for the US economy in remarks prepared for delivery to the Economic Club of New York.

And she said that, broadly speaking, the Fed is holding to its forecasts for US growth over the medium term.

Yellen said that the Fed still has to keep an eye on the global slowdown and markets turmoil as it decides policy, pointing specifically to uncertainty about China and how its troubles and policy shifts affect global growth.

"We have to take into account the potential fallout from recent global economic and financial developments," she said.

Even so, she said that she expects the overall fallout from global market developments on the United States "will most likely be limited." — Agence France-Presse