Global risks and hiring slowdown in the United States warrant a cautious approach to raising interest rates, says Fed Chair Janet Yellen. Bobbi Rebell reports.
The Fed is looking at the UK's European Union membership vote and the U.S.' labor market for when to potentially raise interest rates, said Federal Reserve Chair Janet Yellen in her testimony before the U.S. Senate Banking Committee. (SOUNDBITE) JANET L. YELLEN, CHAIR OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, (ENGLISH) SAYING: "Without a doubt, for the last several months, a number of different metrics suggest a loss of momentum, not a deterioration in the labor market, but a loss of momentum in terms of the pace of improvement. And that is an important consideration, as I mentioned, we believe that it will turn around, expect it to turn around, but we're taking a cautious approach and watching very carefully to make sure that that expectation is born out before we proceed to raise interest rates further" But the markets gave back some gains after she spoke. David Nelson, chief strategist at Belpointe. (SOUNDBITE) DAVID NELSON, CHIEF STRATEGIST, BELPOINTE ASSET MANAGEMENT, (ENGLISH) SAYING: "She seemed to stumble. Like she seemed to be very cautious with her words, and it was pretty clear she doesn't want to see a Brexit. Most economists believe it will be negative for the markets but she also said she didn't want to venture an opinion." Yellen tried to calm worries about the Brexit vote saying that, even if Britain voted to leave the EU, it would likely not trigger a recession in the United States.