Yellen Says Doesn’t Think it Will Be Necessary Soon to Cut Rates

The Federal Reserve's policymaking committee does not expect to cut interest rates anytime soon, Federal Reserve Chair Janet Yellen said on Wednesday.

"I do not expect that the FOMC is going to soon be in a situation where it is necessary to cut rates," Yellen told a committee of lawmakers in Congress, noting that the strength of the labor market gives her succor.

She added that she still expects factors holding down inflation to be transitory.

Watch Live: Fed Chair Janet Yellen Testifies at House Financial Services Committee Hearing

Uncertainty over interest rates had hit bank stocks in recent days. Banking stocks were up, led by Citigroup. Goldman Sachs, up 1.3 percent, gave the biggest boost to the Dow. The S&P financial sector was up nearly 1 percent.

The Fed raised rates in December. But, since then, fears of a China-led global economic slowdown, along with oil's steep slide, have dampened the market's expectations for a hike in coming months.

"Unfortunately, we haven't been able to divorce ourselves from the themes that were prevalent last year," said Eric Wiegand, senior portfolio manager at the Private Client Reserve at U.S. Bank in New York.

Wiegand said the Fed and monetary policy remain at the forefront of investors' concern.