Tags: federal reserve | james bullard | easing | tools

Fed's Bullard: QE and Policy Promises Are Our Best Tools Now

Thursday, 21 November 2013 01:22 PM

The Federal Reserve, having kept interest rates near zero for nearly five years to help the economy, must now rely on bond-buying and communication about future policy intentions, a top U.S. central banker said on Thursday.

According to snippets of a presentation, St. Louis Fed President James Bullard did not elaborate on how best to use the pair of monetary policy tools, known in central banking parlance as quantitative easing (QE) and forward guidance.

The Fed is currently buying $85 billion in bonds each month to spur investment, hiring and economic growth in the wake of the 2007-2009 recession — and has said it will keep buying them until labor-market improvement is sustainable.

Editor's Note: Get Free Guide ‘Maximize Your Social Security Benefits’

It has further said it will keep rates ultra low at least until unemployment falls to 6.5 percent, from 7.3 percent last month, as long as inflation is contained.

"I think the December 2008 FOMC decision unwittingly committed the U.S. to an extremely long period at the zero lower bound similar to the situation in Japan, with unknown consequences for the macroeconomy," Bullard was to tell the University of Arkansas event here.

Pointing to the Bank of Japan's long struggle against deflation and slow growth, Bullard said he has seen "no evidence" that a faster economic recovery results from quickly lowering interest rates to near zero.

Bullard is a voter on the Fed's policy-setting Federal Open Market Committee, or FOMC, this year.

Editor's Note: Get Free Guide ‘Maximize Your Social Security Benefits’

© 2020 Thomson/Reuters. All rights reserved.


   
1Like our page
2Share
StreetTalk
The Federal Reserve, having kept interest rates near zero for nearly five years to help the economy, must now rely on bond-buying and communication about future policy intentions, a top U.S. central banker said on Thursday.
federal reserve,james bullard,easing,tools
254
2013-22-21
Thursday, 21 November 2013 01:22 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved