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The details: At an event hosted by The Atlantic, Yellen, an economist who previously led the Federal Reserve, indicated that the central bank may need to hike interest rates to prevent prices from rising too quickly.
“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat,” Yellen said.
Her comments rippled through markets, feeding a selloff in tech stocks that could take a beating when rates rise. She later clarified that she wasn’t predicting or making any recommendations to the Fed, whose independence she respects, and does not expect inflation to be a persistent, major issue.
“I don’t think there’s going to be an inflationary problem, but if there is, the Fed can be counted on to address [it],” Yellen said later Tuesday at The Wall Street Journal’s CEO Council Summit.
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