Yellen: Fed should 'proceed cautiously' with rate rises

US Federal Reserve chair Janet Yellen said the Fed should "proceed cautiously" before raising interest rates. She said global risks were not expected to have a deep impact on the US, but caution was still appropriate.

Global developments and risks had led policymakers to project a slower path of rate rises than initially expected in December, Ms Yellen said. US markets rose during her speech at the Economic Club of New York.

Her tone was similar to the Fed's statement in mid-March, when the central bank made no change to rates and guided expectations towards a slower pace of increases after December's increase.


Ms Yellen repeated her message from earlier public speeches that volatile oil prices and China's slowing growth, along with how soon inflation would reach the Fed's 2% goal, were key factors guiding the Fed towards taking a gradual approach on raising rates.

Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, said her caution was not surprising, but stood in contrast to support for rate rises from other Fed speakers in recent days.