Fed's Yellen-downturn in US economy possible

Washington, Apr 29: San Francisco Federal Reserve President Janet Yellen said today one of the risks to the global economy is a downturn in the US economy.

The US economy grew slowly in the first quarter but should accelerate in the second half of the year, she said in a speech to the American Academy of Arts and Sciences.

''I'd like to highlight three risks to the global economy. the first pertains to the US economy, itself, where there is potential for a downturn that could have major spillover effects around the globe'' she said.

The US economy grew at a sluggish 1.3 percent in the first quarter of 2006, the Commerce Department said yesterday. It was the fourth consecutive quarter of sub-par economic expansion in the world's largest economy.

Yellen said other risks to the global economy include large investment and savings imbalances and possible disruptions from the re-pricing of risks in international financial markets.

Reuters>