US to stay on growth track despite global risks: Yellen

Washington - In testimony that combined a steady-as-she-goes account of Fed policy with an acknowledgement of intensifying risks, Yellen said there are good reasons to believe the United States will stay on a path of moderate growth that will allow the Fed to pursue "gradual" adjustments to monetary policy.

Tightening financial conditions driven by falling stock prices, uncertainty over China and a global reassessment of credit risk could throw the US economy off track from an otherwise solid course, Federal Reserve Chair Janet Yellen said on Wednesday in prepared testimony to Congress.
In testimony that combined a steady-as-she-goes account of Fed policy with an acknowledgement of intensifying risks, Yellen said there are good reasons to believe the United States will stay on a path of moderate growth that will allow the Fed to pursue "gradual" adjustments to monetary policy.
Family incomes and wealth are rising, domestic spending "has continued to advance," and business investment outside the oil sector accelerated in the second half of the year, she said. Yellen said she expects the labor market to continue to improve and inflation eventually rise toward the Fed's target despite a recent drop in inflation expectations cited by some policymakers as particularly unnerving.
But Yellen acknowledged that some of the weaknesses in the global economy have become self re-enforcing, with weak growth in major manufacturers like China and oversupply on commodity markets rattling the world's oil and mineral exporters. A broad sense of a world slowdown, in turn, and uncertainty about the depth of China's problems, has tightened financial conditions for US businesses.
"These developments if they prove persistent, could weigh on the outlook for economic activity and the labour market," Yellen said in remarks prepared for her semi-annual appearance before the House Committee on Financial Services. A hearing before the committee begins at 10.00am (1500GMT).
An accompanying report said the US financial sector "has been resilient" to stress from oil and weakening corporate debt markets around the world, with "limited" exposure among large US banks. But "if conditions in these sectors worsen...wider stresses could emerge."
 

1oz UAE Gold Bullion Coin

Buy for
Dh4,785.00*
Sell for
Dh4,654.00*

buy sell
Indian Rs 18.95 18.39
Pak Rs 29.05 28.28
Sri Lankan Rs 40.17 38.80
Philippine Peso 13.19 12.87
B. Taka 21.89 21.80
(Rates are against Dh.1)

Stock market index

Dubai - DFM
3,060.00 - 4.71

Abu Dhabi - ADX
4,104.53 + 42.47
Source: Reuters/UAE Exchange Centre LLC

Oil
ICE $ 30.32 - 2.56
NYMEX $ 28.53 - 1.36
WTI $ 27.94 - 1.75
Gold
London $/oz 1,183.70 - 13.10
Mumbai Rs/10gm 28,930.00 - 360
Dubai Dh/gm 142.25 - 1.25

Dh perUSD3.68500Dh perEUR4.25810Dh perSTG5.44742Dh perYEN0.03284

* Indicative retail price provided by DMCC at 7pm Wednesday