Fed Won’t Be Hiking the Interest Rate Again Anytime Soon

Janet Yellen warned that the US economy has worsened which means there won’t be a second interest rate hike anytime soon.

She warned financial conditions in the US had become "less supportive" of growth.

The US central bank released Ms Yellen's prepared comments ahead of her latest appearance before Congress.

The bank raised interest rates by 0.25% for the first time in nine years in December.

US stock markets opened higher after the comments, which point towards continuation of monetary policy easing, rather than a tightening of of policy, which had been expected before the end of last year.

Recent stock market turmoil has prompted most Wall Street analysts to lengthen their forecast of when the next US Federal Reserve interest rate rise will occur, from March to June at the earliest.

US stock markets have taken a battering in recent weeks over concerns caused by the economic slowdown in China, which has in turn led to lower commodity and oil prices, while the weaker yuan has made Chinese exports cheaper than those from the US.

The Dow Jones is down some 8.5% since the start of the year, the S&P 500 is down more than 9% since 1 January and the Nasdaq is lower by 14%.

US economic growth in the last three months of 2015 also slowed dramatically, to 0.7% compared with the same period a year earlier, falling from 2% three months earlier.