U.S. Federal Reserve chair Janet Yellen (R) is applauded before speaking to the Economic Club of New York in New York March 29, 2016. Lucas Jackson/Reuters Federal Reserve Chair Janet Yellen reiterated on Tuesday that interest rates would rise slowly.

Yellen was speaking at the Economic Club of New York.

In her prepared remarks published before the speech Tuesday, Yellen said raising rates with caution was "especially warranted."

That's because the Fed would be in a better position to raise rates in an economy that's strengthening faster than expected.

But if it needs to provide more stimulus by cutting rates in an economy struggling with low inflation, its tools are more limited.

Or, as Yellen said, the Federal Open Market Committee's ability to use conventional monetary policy is "asymmetric."

"Reflecting global economic and financial developments since December, however, the pace of rate increases is now expected to be somewhat slower," Yellen said.

In December, the Fed raised the benchmark federal funds rate to a range of 0.25% to 0.50%, after keeping that range near 0% for seven years. If it had to cut rates, there isn't much room to go lower without turning negative, though Yellen said the Fed had other tools to put downward pressure on long-term rates.

It was the first time we heard from Yellen since the Fed's meeting two weeks ago, when it cut its outlook for interest-rate hikes this year to two from four.

Yellen followed at least four regional Fed governors, who at times sounded more willing to raise rates than she did at her post-FOMC-meeting news conference.

But she stuck to her script.

In a note to clients, Renaissance Macro's Neil Dutta wrote:

The FOMC is becoming increasingly more accommodative. The Fed is more accommodative for two main reasons in our view: (1) weak global growth and (2) to make sure inflation expectations remain anchored. This speech kills [a] June [rate hike], in our view.

The contention largely revolves around the "dot plot," which shows FOMC members' expectations for rates and telegraphs the number of hikes they expect. Yellen has the burden of crafting a message that leads the market away from the precision of the dots to the Fed's intended message, according to BMO's fixed-income-strategy team in a morning note.

Stocks surged into the green after headlines from Yellen's prepared remarks crossed. The dollar fell, while Treasurys gained.

The Fed Fund futures market fully priced in the next rate hike for January 2017 after Yellen's speech crossed.