Yellen: Fed can use "every bullet" in its arsenal

SAN FRANCISCO (Reuters) - The Federal Reserve can use "every bullet" in its arsenal to boost the economy without much fear of kicking up inflation because of the huge output gap, San Francisco Federal Reserve Bank President Janet Yellen said.

Structural adjustments in the U.S. economy may have pushed the natural rate of unemployment to 5 percent of 5.5 percent now from 4.75 percent a few years ago, Yellen said while answering questions after a speech to the Commonwealth Club of California in San Francisco on Tuesday.

With the jobless rate now above 9 percent, though, "I would be thrilled" to see the rate drop to the 6 percent level within the next few years, Yellen said.

(Reporting by Ros Krasny; Editing by Jan Dahinten)