Janet Yellen, President of the Federal Reserve Bank of San Francisco, took a shot tonight at inflation hawks who worry that the Fed’s easy money policies are going to send consumer prices soaring.   The hawks, she notes, worry that the Fed has pumped too much money into the economy and won’t be able to withdraw it in time to forestall inflation. She says the Fed has the tools it needs to withdraw the money when needed – it can sell the mortgage and Treasury bonds it has accumulated if needed and some of its emergency programs are already tapering off. Another risk she tries to shoot down is a replay of the 1970s. Back then, the Fed thought that high unemployment meant the economy was burdened with lots of slack that would keep inflation under control. It responded with low interest rates. It turned out there wasn’t... more...