The federal budget needs to be "on a sustainable long-run trajectory" that allows policy actions to boost growth and create jobs without snuffing out the recovery, Federal Reserve Board vice chairwoman Janet Yellen told a group in San Francisco Tuesday.

"It is crucial that the federal budget be put on a sustainable long-run trajectory, and we should not postpone charting that course," she said. Failure would mean "serious economic costs and risks in the long term and possibly sooner."

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