Yellen cites housing, geo-political risk to US economy

She said Fed will taper QE as long as economy is improving

Federal Reserve Chair Janet Yellen said the central bank will continue to provide a high degree of monetary policy accommodation, and cited geo-political turmoil and weak housing data as risks to the U.S. economy.

Yellen, speaking to the congressional Joint Economic Committee on Wednesday, also indicated concerns over investors exerting risky behavior given the extended period of low interest rates.

"Some reach-for-yield behavior may be evident," Yellen said in her prepared testimony, pointing to the lower-rated corporate debt markets as an example.

Yellen added that issuance of syndicated leverage loans and high-yield bonds has expanded, while underwriting standards loosened, though she said that these increases appear modest - particularly at large banks and life insurers.

The Fed chief repeated the view of the Federal Open Market Committee that despite the expected U.S. economic growth, considerable slack in the labor markets and low inflation warrants a "high degree of monetary accommodation."

Last month the Fed reduced its monthly bond purchases to $45 billion from $55 billion.