The high unemployment level results from "a broad-based cyclical shortage of demand" and the Fed is correct to target maximum employment as part of its policy stance, Federal Reserve Board Vice Chair Janet L. Yellen said Monday.

"I believe the policy steps we have taken recently are in accord with [a] balanced approach. With employment so far from its maximum level and with inflation currently running, and expected to continue to run, at or below the Committee's 2 percent longer-term objective, it is entirely appropriate for progress in attaining maximum employment to take center stage in determining the Committee's policy stance," she told a conference sponsored by the AFL-CIO, according to prepared text released by the Fed.

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