Fed Chair Janet Yellen

Global economic and financial uncertainty has heightened the risk to the U.S. economy and justified a slower path of interest-rate increases, Federal Reserve Chairwoman Janet Yellen said.

Wall Street Journal staffers David Harrison and Michael S. Derby note that the Fed chief explained the central bank’s divergence on economic outlook, with a net net of fewer expected rate moves. Harrison and Derby write:

They sharply reduced their projected path of interest-rate rises this year, forecasting a total increase of half a percentage point, down from the full percentage point increase they expected in December. Ms. Yellen sought to explain that shift in her remarks Tuesday.

The key, she said, is that the global economic and financial backdrop looms more threateningly now than before, as evidenced by the market turbulence of last summer and early this year. And even though officials expect the U.S. economy to weather any further rough patches, the dangers can’t be ignored.

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