LOS ANGELES, March 23 (Reuters) - San Francisco Fed President Janet Yellen on Tuesday said the U.S. Federal Reserve's ultra-low rate policy is currently appropriate but she would back raising interest rates when conditions warrant it.
'I think I am as committed to price stability and the attainment of price stability as any member of the FOMC,' she said, referring to the policy-setting Federal Open Market Committee.
'I am fully aware that that to continue the pattern of having inflation expectations be stable and inflation well contained, the Fed has to be ready to take away the punch bowl when it is necessary, and I fully anticipate participating. When the time has come, am I going to support raising interest rates? You bet. I don't want to see inflation pick up.'
The Fed's pledge to keep rates low for an 'extended period' is appropriate given the slow economic recovery and subdued inflation, she said.
'I see the statement as not being one that is in any way unconditional about time - it has no particular time commitment. It is a statement that is tied to the prevalence of certain conditions that are listed, and possibly others,' she told reporters after a speech here.
'We anticipate that those conditions will prevail for long enough that it's the expectation that it will be an extended period of time before the economy calls for higher interest rates,' she said.
(Reporting by Ann Saphir in Los Angeles; editing by Andrew Hay) Keywords: USA FED/YELLEN (ann.saphir@thomsonreuters.com; +1-312-408-8592; Reuters Messaging: ann.saphir.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
'I think I am as committed to price stability and the attainment of price stability as any member of the FOMC,' she said, referring to the policy-setting Federal Open Market Committee.
'I am fully aware that that to continue the pattern of having inflation expectations be stable and inflation well contained, the Fed has to be ready to take away the punch bowl when it is necessary, and I fully anticipate participating. When the time has come, am I going to support raising interest rates? You bet. I don't want to see inflation pick up.'
The Fed's pledge to keep rates low for an 'extended period' is appropriate given the slow economic recovery and subdued inflation, she said.
'I see the statement as not being one that is in any way unconditional about time - it has no particular time commitment. It is a statement that is tied to the prevalence of certain conditions that are listed, and possibly others,' she told reporters after a speech here.
'We anticipate that those conditions will prevail for long enough that it's the expectation that it will be an extended period of time before the economy calls for higher interest rates,' she said.
(Reporting by Ann Saphir in Los Angeles; editing by Andrew Hay) Keywords: USA FED/YELLEN (ann.saphir@thomsonreuters.com; +1-312-408-8592; Reuters Messaging: ann.saphir.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.