Yellen: I’m Not Worried About Higher Interests Rates Hurting the Economy

KING: "If we have a 1 percent increase in the interest we're paying on our current federal debt -- 1 percent, which I think everyone agrees is likely in the foreseeable future -- that will suck more money out of the federal budget than the sequester."
YELLEN: "So, I would agree that interest does matter to spending and to the accumulation of debt. I would also want to point out, though, that interest rates are unlikely to begin rising until we are in a strong economic recovery. So we will -- we eventually will start to raise interest rates. I mean, I'm assuming the economy will continue to recover and at some point that will become appropriate. But in thinking what will happen with deficits and the debt it's important to keep in mind that a stronger economy will be very good for the federal budget deficit. There will be stronger revenues coming in and the declining social safety net spending. And that will be an offset, and probably the most important element for the deficit and the evolution of the debt. Yes, interest payments will go up. But I believe the larger piece of it is likely be that a stronger economy will improve the budget. So both of those things are operatives."