Fed needs to stay alert for possible surprises - Yellen

NEW YORK (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday the U.S. central bank would need to stay alert in case the economy, and inflation, do not behave as policymakers expect. "We will have to watch unfolding evidence and evaluate it with an open mind and very carefully in the months ahead to make the assessments that will be necessary," Yellen told the Economic Club of New York in answer to a question. Yellen reiterated her expectation that the presence of an unusually high number of long-term unemployed would keep wage-related price pressures in check as the jobs market strengthened, but said the Fed cannot afford to hold to a fixed view. "There can be surprises," she said. "One of the surprises that we could see - I wouldn't rule out, it's not what I think is most likely - but would not rule out the possibility that inflation could rise to levels where we would need to address it before we might expect at this point." "That is something that we will be quite attentive to." (Reporting by Jonathan Spicer and Walden Siew; Writing by Tim Ahmann; Editing by Chizu Nomiyama)