WASHINGTON, Feb. 10 (UPI) -- Federal Reserve Chairwoman Janet Yellen on Wednesday warned the U.S. economy faces several risks that could affect the agency's plans to raise interest rates.
Yellen said the cost of borrowing was rising, stock prices have declined significantly in the first weeks of the year, and the dollar continues to strengthen against global currency -- all of which could harm economic growth.
"Financial conditions in the United States have recently become less supportive of growth," Yellen said, according to prepared remarks released ahead of her appearance before the House Financial Services Committee in Washington, D.C. "These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market."
Yellen did not rule out a federal rate increase in March but did not specify any timeline for such a decision. The agency is expected to meet sometime in mid-March.
Yellen reiterated the Federal Reserve expects to continue introducing "gradual" interest rate increases.
"Of course, monetary policy is by no means on a preset course," Yellen said. "The actual path of the federal funds rate will depend on what incoming data tell us about the economic outlook, and we will regularly reassess what level of the federal funds rate is consistent with achieving and maintaining maximum employment and 2 percent inflation."
U.S. economic growth in 2015 slowed down to an estimated 1.75 percent, restrained specifically by the dollar's strength and its effect on exporters, Yellen said. Household spending also increased due to lower fuel prices and steady jobs growth, a trend Yellen said she expects to continue.