Fed’s Bullard Says Monetary Policy Is Appropriate, Risk of Recession Low
U.S. monetary policy is appropriate for the current state of the economy and the risk of recession remains low, said James Bullard, president of the Federal Reserve Bank of St. Louis.
“The stance of monetary policy has been appropriately calibrated to try to meet, as best we can, the unusual macroeconomic circumstances,” Bullard said today in remarks at the St. Louis Fed. “The most likely path for the economy going forward is one of modest, albeit unspectacular, growth, and that the chances of recession are only modestly higher than they were earlier this year.”
Chairman Ben S. Bernanke said last month in a speech at a Fed conference at Jackson Hole, Wyoming, that the central bank still has stimulus tools, while not providing details or committing to deploying them.
Policy makers will meet for two days this month to “allow a fuller discussion” of the economy and the Fed’s possible response, Bernanke said. They are scheduled to meet Sept. 20-21.
At their meeting last month, Fed officials decided to hold the benchmark interest rate at a record low at least until mid-2013.
Bullard said today the central bank shouldn’t commit to a particular monetary policy for a set period of time. Instead, policy makers should determine the level of stimulus at each meeting based on fresh economic data, he said.
“It is time for the committee to discard one-time policy changes with fixed end dates,” Bullard said.
To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net
To contact the editors responsible for this story: Brendan Murray at brmurray@bloomberg.net; Chris Wellisz at cwellisz@bloomberg.net
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