Here is further proof of what I said! I bolded tha interesting part.
WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen returned to Capitol Hill on Thursday amid an ongoing meltdown in global equity markets and growing skepticism that the U.S. central bank can carry out its long-planned pivot to "normal" monetary policy.
Yellen repeated to the Senate Banking Committee the testimony she delivered on Wednesday to a House of Representatives committee, putting a brave face on the U.S. economic recovery while acknowledging that a weakened global economy and steep slide in U.S. equity markets is tightening financial conditions faster than the Fed wants.
Yellen warned on Wednesday that the rout, if proven to be "persistent," could change the U.S. economic outlook - and by implication the Fed's policy plans.
For the time being persistence seems just what investors have in mind. U.S. stock indexes all dropped more than one percent when they opened, while major European and Asian exchanges were off more than two percent overnight and into Thursday.
Investors in Fed Funds contracts meanwhile fully priced out the expectation of a Fed rate hike this year, pushing the interest rate expected in December below the effective rate calculated by the central bank.
In her prepared testimony, Yellen leaned heavily on continued job creation in the United States, rising wages, and an expectation that household spending would keep the economy afloat. But she also acknowledged that global and U.S. market conditions could upend that forecast.
