By Ann Saphir SAN FRANCISCO (Reuters) - With the U.S. economy close to full employment and inflation headed toward the Federal Reserve's 2 percent goal, it "makes sense" for the U.S. central bank to gradually lift interest rates, Fed Chair Janet Yellen said on Wednesday. "Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road - either too much inflation, financial instability, or both," Yellen told the Commonwealth Club of California in San Francisco. "In that scenario, we could be forced to raise interest rates rapidly, which in turn could push the economy into a new recession." The Fed raised short-term rates last month for only the second time since the 2007-2009 financial crisis, when it slashed rates to near zero and began buying massive amounts of Treasuries and mortgage-backed securities to push down long-term borrowing costs.
By Tom Miles and Stephanie Nebehay GENEVA (Reuters) - China will build a "new model" of relations with the United States, President Xi Jinping said on Wednesday in a speech that portrayed China as the leader of a globalized world where only international cooperation could solve the big problems. Two days before the inauguration of Donald Trump who has promised to be a U.S. president putting "America first", Xi urged countries to resist isolationism.