US inflation still slightly below target, Fed's Yellen says

The US central bank´s focus had shifted to maintaining gains in growth, its top policymaker said, adding that inflation was still a little bit below its target.

In remarks at Gerald R. Ford School of Public Policy at the University of Michigan, Federal Reserve president Janet Yellen said: "Before, we had to press down on the gas pedal trying to give the economy all of the oomph that we possibly could."

Now, instead, it was trying to "give it some gas, but not so much that we’re pushing down hard on the accelerator."

Significantly, she said the rate of unemployment, at 4.5% in February, had fallen a tad beneath what she and her fellow rate-setters believed to be the lowest sustainable rate.

Inflation, on the other hand, was still "slightly" below the Fed's 2.0% target, she added.

Yellen emphasised that she was looking at the so-called 'core' measure for the personal consumption expenditures price deflator.

In February, the core PCE stood at 1.8% year-on-year, unchanged from the previous month.

"We want to be ahead of the curve and not behind it. We don’t want to be in a position where we have to raise rates rapidly, which could conceivably cause a recession."

As of 0639 GMT the yield on the benchmark 10-year US Treasury note was down by three basis points at 2.33%, having given back nearly all of the previous day's gains.