Tags: fed | bullard | spring | swoon

Too Early to Worry About Another Spring 'Swoon,' Fed's Bullard Says

Tuesday, 09 April 2013 09:05 AM

A top Federal Reserve official downplayed the meager March jobs report, arguing he still expects unemployment to tick down to about 7 percent by year's end and suggesting the economy is not entering another spring "swoon."

St. Louis Fed President James Bullard pointed to a stronger Europe and more positive economic data beyond the employment report, which last week showed only 88,000 jobs were created last month in the United States.

However, Bullard, speaking on CNBC on Tuesday, added he was concerned that the drop in the unemployment rate to 7.6 percent, from 7.7 percent the previous month, was due to fewer Americans hunting for work.

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

"It's not changing my outlook so far. I'm inclined to look past the report because I think there are some mixed messages in there," including stronger average job growth over the last six months.

"This is a down number, but we'll see," he said. "I don't think we have enough evidence right now to say there's any kind of a swoon going on," he said.

"And I don't think this is like the other years.Europe is a lot calmer than it was in 2011 or 2010 or 2012. And I don't see Europe coming back onto the global financial stage in a big way," he said. "I'm expecting that part of the world to remain calm with respect to financial markets. That will help the U.S. through the summer."

The Fed has tied the duration of its bond buying program to a "substantial improvement" in the labor market and plans to keep interest rates near zero until the unemployment rate falls to about 6.5 percent.

Investors are anxiously predicting when the central bank will taper or end its monthly purchases of $85 billion in bonds.

"Surely if we get into the low sevens (unemployment rate) everyone will say there's substantial improvement in the labor market," Bullard said.

He said that he'd be willing to reduce the central bank's bond-buying program in "small increments."

“If [the economy] continues to improve, we will be in good position to make a decision. And I think we have more willingness to make a relatively small adjustment if necessary to show markets we're adjusting,” he said.

“I would be willing to move in small increments. You're not doing a lot on a particular day. You are signaling direction,” he said. “So I would be willing to make smaller moves. The Fed so far during the last five years has not been willing to do that with respect to these programs.”

Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.

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A top Federal Reserve official downplayed the meager March jobs report, arguing he still expects unemployment to tick down to about 7 percent by year end and that there is not enough evidence to suggest the U.S. economy is entering another spring swoon.
fed,bullard,spring,swoon
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2013-05-09
Tuesday, 09 April 2013 09:05 AM
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