In its December policy statement, when the Fed raised short-term interest rates, the central bank described risks to the economy as balanced, meaning threats that could undermine growth and hiring were no greater than developments that could boost them more than expected.

After financial markets started the new year in turbulence, the Fed backed away from that assessment of risks to the outlook, saying in its January policy statement it couldn’t make a judgment in light of hard-to-discern global developments.

“The [Fed] is closely monitoring global economic and financial developments and is assessing their implications for the labor market and inflation, and for the balance of risks to the outlook,” the Fed said last month.

The Fed’s assessment of the balance of risks is meaningful because officials won’t be inclined to raise short-term interest rates again if it sees growing risks to the outlook. Ms. Yellen’s testimony therefore underscores the market’s belief that a rate increase in March is highly unlikely, unless markets turnaround clearly in the weeks ahead and economic data show a firm growth and hiring backdrop.

In her testimony, Ms. Yellen made clear she saw an abundance of risks that could undermine growth and hiring and hold inflation down longer than hoped or expected.

“Financial conditions in the United States have recently become less supportive of growth, with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar,” she said. “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market, although declines in longer-term interest rates and oil prices provide some offset.”

In a discussion of global developments, she went on at great length:

“Although recent economic indicators do not suggest a sharp slowdown in Chinese growth, declines in the foreign exchange value of the renminbi have intensified uncertainty about China’s exchange-rate policy and the prospects for its economy. This uncertainty led to increased volatility in global financial markets and, against the background of persistent weakness abroad, exacerbated concerns about the outlook for global growth. These growth concerns, along with strong supply conditions and high inventories, contributed to the recent fall in the prices of oil and other commodities. In turn, low commodity prices could trigger financial stresses in commodity-exporting economies, particularly in vulnerable emerging-market economies, and for commodity-producing firms in many countries. Should any of these downside risks materialize, foreign activity and demand for U.S. exports could weaken and financial market conditions could tighten further.”

She also pointed to the risks that could prevent inflation from rising toward the Fed’s 2% target.

Her assessment of what could go right, on the other hand, was relatively brief and didn’t show much conviction.

“Of course, economic growth could also exceed our projections for a number of reasons, including the possibility that low oil prices will boost U.S. economic growth more than we expect,” she said.