DENVER Oct 21 The Federal Reserve is looking
at ways to offer further monetary stimulus to a shaky U.S.
economic recovery, the central bank's influential vice chair,
Janet Yellen, said on Friday.
Yellen said she was concerned by signals in the U.S. bond
market that weak economic activity was again heightening the
perceived risk of deflation.
She argued Europe's financial crisis threatened to spill
over into the United States, by forcing anxious banks to
tighten credit at time when America's rebound is still
"The potential for such adverse financial developments to
derail the recovery creates, in my view, significant downside
risks to the outlook," Yellen told a financial industry
conference in prepared remarks.
She argued inflation is not an immediate concern, but that
the nation's unemployment problem posed a persistent problem
that needs to be addressed by policymakers.
"We are prepared to employ our tools as appropriate to
foster a stronger economic recovery in a context of price
stability," she said.
Yellen urged lawmakers not to cut back on spending too
quickly, since this could also risk derailing the expansion.