TOKYO — Federal Reserve Board Vice Chair Janet Yellen said on Wednesday that the Fed must unwind asset purchases "in a timely way" when the time comes in order to avoid inflationary pressures.

U.S. short-term and long-term interest rates will rise when the Fed begins to normalize monetary policy by selling off financial assets that it has bought as part of easing, she told an IMF/WB panel discussion on sovereign risk, capital markets and financial stability.

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