Bullard Sees ‘Classic Challenge’ While FOMC Nears Two Goals

Federal Reserve Bank of St. Louis President James Bullard, speaking to the Tennessee Bankers Association in Palm Beach, Florida, says the Fed “faces a classic challenge concerning the appropriate pace of monetary policy normalization,” as inflation and employment near its goals. *Unemployment has continued to decline and inflation is low but moving back toward the Federal Open Market Committee’s 2% target: Bullard *The “monetary policy stance remains far from normal, despite recent reductions in the pace of asset purchases:” Bullard *“Today, the FOMC is much closer to its macroeconomic goals:” Bullard *“The FOMC is closer to target today than it has been most of the time since 1960,” Bullard says, referring to both inflation and unemployment *Labor markets do not seem to be fully recovered and, while inflation is low, it’s moving back toward the FOMC’s target: Bullard *Debate over how quickly to return policy to normal “is likely to garner significant attention as the economy continues to improve during 2014:” Bullard

To contact the reporter on this story: Steve Matthews in Atlanta at smatthews@bloomberg.net

To contact the editors responsible for this story: Chris Wellisz at cwellisz@bloomberg.net James L Tyson

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