Yellen commented on the bifurcation of views about inflation that has emerged lately, saying that “in my career, I have never witnessed a situation like the one that exists now, when views about inflation risks have coalesced into two diametrically opposed camps.”

She placed herself in the camp that worries more about falling, rather than accelerating, prices. “My personal belief is that the more significant threat to price stability over the next several years stems from the disinflationary forces unleashed by the enormous slack in the economy,” she said.