Fed's Yellen cites global risks but says U.S. should motor through

By Howard Schneider and Lindsay Dunsmuir
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WASHINGTON (Reuters) - Tightening financial conditions and uncertainty over China pose risks to the U.S. recovery, but chances are slim the Federal Reserve would need to reverse the rate tightening cycle it began in December, Fed Chair Janet Yellen told U.S. lawmakers on Wednesday.

Global risks have intensified and could slow the U.S. economy, but "I don't expect the (Federal Open Market Committee) is going to be soon in the situation where it is necessary to cut rates," Yellen said. "There is always a risk of a recession...and global financial developments could produce a slowing in the economy."

But "I think we want to be careful not to jump to a premature conclusion about what is in store for the U.S. economy. I don't think it is going to be necessary to cut rates."

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