Yellen says Fed must focus on globalization

WASHINGTON - The growing globalization of financial markets requires the Federal Reserve to understand how economic developments in other nations may affect the U.S. economy, Federal Reserve Chair Janet Yellen said Thursday.

Yellen said the Fed needs better insights into things such as global capital flows to achieve its domestic objectives of maximum employment and price stability.

"Fulfilling these objectives requires us to achieve a deep understanding of how evolving developments in financial markets and economies around the world affect the U.S. economy and also how U.S. policy actions affect economic and financial developments overseas," she said to participants at a Washington conference.

Yellen's remarks came at the start of a two-day conference sponsored by the Fed, the European Central Bank and the Federal Reserve Bank of New York. She did not discuss monetary policy or the current state of the U.S. economy.

At its last board meeting in October, the Fed announced the end of its landmark bond buying stimulus program and upgraded its view of the U.S. job market. It reiterated its plan to maintain its benchmark short-term interest rate near zero "for a considerable time."