March 29, 2016 / 5:46 PM / 3 years ago

Fed held rates to get out ahead of global risks: Yellen

U.S. Federal Reserve chair Janet Yellen is applauded before speaking to the Economic Club of New York in New York March 29, 2016. REUTERS/Lucas Jackson

NEW YORK (Reuters) - The Federal Reserve wanted to pro-actively respond to a weakening of global economic growth forecasts since December, a concern that played a role in the U.S. central bank leaving interest rates unchanged earlier this month, Fed Chair Janet Yellen said on Tuesday.

“That may look like a shift in the reaction function, but it really isn’t,” she told the Economic Club of New York. “Global growth was an important factor and we wanted to get ahead of it. And the market response has been favorable.”

Yellen added that Fed policymakers “wanted to get ahead of that development and adjust our thinking about the path of policy in order to counteract it before it shows up as a degradation in our forecast for unemployment and inflation.”

Reporting by Jonathan Spicer and Jennifer Ablan; Editing by Chizu Nomiyama

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