Federal Reserve Official Janet Yellen took on inflation hawks Tuesday saying its a long way off. 

“I think the predominant risk is that inflation will be too low, not too high, over the next several years,” Yellen , who serves as president and CEO of the Federal Reserve Bank of San Francisco in a speech delivered to the Commonwealth Club of California.

Yellen, who is rumored to be one of President Obama’s leading contenders to chair the Federal Reserve should he opt to replace Ben Bernanke, said she expects the pace of recovery from the current financial crisis to be “frustratingly slow,” and urged prudence to those who have suggested a rate hike to combat inflation.

“I think the predominant risk is that inflation will be too low, not too high, over the next several years,” Yellen said in prepared remarks.

Yellen reiterated the FOMC’s suggestion that the federal funds rate could stay low, or at zero “for an extended period,” and warned of the serious possibility of deflation thanks to “downward pressure” on wages and heavy discounting by retailers and businesses in an effort to boost sales.

Yellen’s comments prompted a surge in the demand for short-term Treasurys on Wednesday, while demand for longer-term Treasury notes fell.

Yellen argued the real danger is not inflation, but an overly-aggressive Federal Reserve.

“If anything, I’m more concerned that we will be tempted to tighten policy too soon, thereby aborting recovery,” Yellen said.

She referenced the Fed’s premature tightening of monetary policy in 1936, which lead to a relapse in the recession and cautioned against repeating those mistakes.

In response to arguments that we could be in for a period of stagflation, where inflation is coupled with a slow growing or stagnant economy, Yellen argued that “the economy has substantial slack,” and the unemployment rate is far too high to make inflation a serious threat. She also discounted theories that the large federal budget deficit could lead to a period of heavy inflation and reiterated the Fed’s commitment to “doing everything in its power to foster recovery while maintaining price stability.”