WASHINGTON (AP) — Federal Reserve Chair Janet Yellen raised the possibility Wednesday that the Fed would consider slowing the pace of its interest rate increases if inflation remained persistently below its target level.

For the moment, Yellen signaled no change in policy, indicating that the three rate hikes since December will likely be followed by one more hike this year. She also said the Fed wants to begin gradually trimming its massive $4.5 trillion in bond holdings later this year, a move that will also put upward pressure on interest rates.

But Wall Street investors took heart from her...