Fed member wants more data before slowing stimulus
WASHINGTON (AP) — James Bullard, a voting member of the Federal Reserve, said Friday that the Fed should review more economic data before deciding whether to reduce its bond purchases.
The president of the Federal Reserve Bank of St. Louis said during a speech in Boston that he understands why some believe economic growth will pick up later this year. But he said previous forecasts for improvement have proven premature.
Bullard has expressed concerns that inflation remains too low to begin reducing the $85 billion a month in bond purchases. The bond purchases have kept long-term interest rates low and encouraged more borrowing and spending.
His comments came shortly after the government said job growth slowed in July. Some economists said the weaker job figures could prompt the Fed to wait until December to slow the bond purchases.
Bullard cast a dissenting vote at the Fed’s June meeting because he felt the Fed needed to focus more on ultra-low inflation.
At the meeting this week, Bullard voted in support of the statement. This time, it included new language saying that inflation persistently below the Fed’s 2-percent target “could pose risks to economic performance.”
In his speech Friday, Bullard said that the Fed’s interest-rate committee “would not normally remove policy accommodation in an environment where inflation is below target and is projected to remain there.”
He said it is important to see if better economic data materialize in the months and quarters ahead before making a decision about the bond purchases.