Fed's Yellen says fear of high inflation not legitimate

WASHINGTON Tue Nov 13, 2012 4:55pm EST

WASHINGTON (Reuters) - The Federal Reserve is not sowing the seeds for future runaway U.S. inflation via its aggressive action to spur an economic recovery, a top U.S. central banker said on Thursday, flatly rejecting the claims of some critics.

"I think that this is a fear that is not at all legitimate," Federal Reserve Vice Chair Janet Yellen told an audience at the Haas School of Business, University of California, Berkeley.

"If we left all of that accommodation in place as the economy recovers and got back to full employment without ever drawing it back, then the proviso ... money causes inflation, would have some justification. But we're not in that situation," she said.

(Reporting by Alister Bull, editing by Gary Crosse)

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