Yellen: Persistent economic weakness could slow rate hikes

WASHINGTON (AP) — Federal Reserve Chair Janet Yellen cautioned Wednesday that global weakness and falling financial markets could depress the U.S. economy's growth and slow the pace of Fed interest rate hikes.

Members of an activist group, the Fed Up coalition, attended the hearing wearing T-shirts emblazoned with the messages "What Recovery?" and "Let Our Wages Grow."

The group has been urging the Fed to delay further rate hikes until the job market improves further, especially for minority groups.

— Sounded her concern about China's weaker currency and economic outlook, which are rattling financial markets.

— Observed that the central bank still thinks energy price declines and a stronger dollar will fade in coming months and help raise inflation back up to the Fed's 2 percent target rate.

U.S. growth, as measured by the gross domestic product, slowed sharply in the fourth quarter of 2015 to a meager annual rate of 0.7 percent.

While many Democrats expressed support for a go-slow approach by the Fed in raising rates, Republicans on the committee argued that the subpar economic recovery over the past 6½ years was evidence of the mismanagement of the economy by President Barack Obama.