BOSTON Oct 14 The Federal Reserve may need to
run a "high-pressure" economy in order to reverse damage from
the crisis that depressed output, sidelined workers and risks
becoming a permanent scar, Fed Chair Janet Yellen said in a
broad review of where the recovery may still fall short.
Though not addressing interest rates or immediate policy
concerns directly, Yellen's lunch address on Friday to a
conference of policymakers and top academics laid out the
deepening concern at the Fed that U.S. economic potential is
slipping - and may need aggressive steps to rebuild it.
The question, Yellen said, is whether that damage can be
undone "by temporarily running a 'high-pressure economy,' with
robust aggregate demand and a tight labor market. One can
certainly identify plausible ways in which this might occur."
(Reporting by Howard Schneider and Svea Herbst-Bayliss; Editing
by Andrea Ricci)