She argued that interest rates should seldom be used to combat risks to financial stability and that doing so to counter the US housing bubble would have had devastating economic consequences.
US stock and bond markets have rocketed on the back of low interest rates, with some critics fearing the formation of new asset bubbles that will eventually burst.
But Yellen eschewed such concerns. “I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment,” she said at an International Monetary Fund event yesterday.
Her comments came ahead of the closely watched latest government job numbers today. Data from payrolls processor ADP yesterday said US private employers had hired 281,000 workers in June, beating expectations of 200,000.