Fed' s Yellen sticks to her guns as global market rout worsens

Federal Reserve Chair Janet Yellen returned to Congress with a brave face on Thursday amid a worsening meltdown in global markets and growing skepticism the U.S. central bank can carry out its long-planned pivot to " normal" monetary policy.

Testifying for a second straight day before lawmakers, Yellen repeatedly stressed that the Fed is not on a " pre-set path" even though, for now, she still expects it to gradually raise interest rates this year, given the strong US labor market and other bright spots in the economy.

With investors stampeding to safer assets globally, the head of the world' s most influential central bank acknowledged that a weakened global economy and a steep slide in stock markets was tightening financial conditions faster than the Fed wants.

Republican Senator Patrick Toomey told her that negative U.S. rates " would put the U.S. deep in the midst of a global currency war which is won by he who bases his currency the most."

While repeating that she expects a gradual rise in U.S. rates, Yellen said the Fed is studying the idea of ​ ​ negative rates because of their adoption elsewhere. " I would not take those off the table," she said.

But Yellen stuck with a belief that strong job creation, rising wages, and solid household spending would keep the US economy afloat. In another sign of strength at home, the Labor Department reported on Thursday that fewer Americans than expected filed for unemployment benefits last week .

Bank shares dragged Wall Street lower on Thursday on concerns the a slowing global economy will continue to pressure interest rates, but energy shares helped the market pare losses on a report that OPEC may move to cut oil production.

Wall Street ends far from lows .....

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