St. Louis Federal Reserve Bank President James Bullard said on Friday the US economic outlook is brighter and household confidence has improved, suggesting he sees no need for further steps to ease financial conditions. "I think the data is coming stronger on the US economy. I think it's a good time to wait and see and gather more data, get a better read on what's going on in Europe, and see what is going to happen next," he told reporters after a speech at Simon Fraser University.
Bond buying would be a potent tool, and it would have important effects on the economy, Bullard said. "But we already have a lot of things on the table," he said. However, Bullard said he would have reservations about any further Fed bond buying because it could accelerate an already sharp recent climb in energy prices. Some Fed officials believe high unemployment and sluggish growth demand another round of quantitative easing to kick the recovery into higher gear, while others, including Fed Chairman Ben Bernanke, have suggested renewed bond buying remains an option should the recovery lose steam.
"I would be concerned that we not undertake a policy move like QE that would possibly feed into a global increase in oil prices," he told reporters after a speech at Simon Fraser University. After the Fed announced its second round of quantitative easing in November 2010, commodity prices around the world rose, in part because as the dollar's value fell, other assets rose in price.
Comments
Comments are closed for this article.