Yellen still sees gradual pace for rate hikes

WASHINGTON (AP) — Federal Reserve Chair Janet Yellen told Congress that the central bank still expects to raise interest rates at a gradual pace this year but understands the dangers of waiting too long to tighten credit.

Testifying to Congress for the first time since President Donald Trump took office, Yellen referred implicitly to the ambitious economic program Trump has promised. She said the Fed recognizes that sharp changes in tax policy and government spending could influence the Fed’s decisions.

But she says “it’s too early to know what policy changes will be put in place or how their economic effects will unfold.”

Many economists say they think Trump’s stimulus program could cause the Fed to accelerate the pace of its rate increases beyond the three it has said it envisions for this year.