US Treasury Secretary Janet Yellen said interest rates may have to rise modestly to prevent the US economy from overheating due to higher levels of government spending, without specifying a timeframe. It may be that interest rates will have to rise somewhat to make sure our economy doesnt overheat, Yellen said in an interview with the Atlantic recorded Monday that was broadcast on the web on Tuesday. It could cause some very modest increases in interest rates.
Stocks briefly extended their losses on Tuesday and the dollar touched session highs following Yellens remarks. The yield on 10-year Treasuries pared declines.