Bullard Fed not Close to Winding Down Stimulus

A senior central banker sought to give reassurance on Thursday that the Fed is in no hurry to start winding down its economic stimulus after comments by chairman Ben Bernanke sent stock markets tumbling.

James Bullard, president of the Federal Reserve Bank of St. Louis, said on Thursday he did not think the Fed was “that close” to starting the process of winding down its support although it was the likely next step if the economy continued to improve and inflation picks up.

Share prices around the world fell sharply after Bernanke said on Wednesday that the Federal Reserve may start to trim its bond purchases at one of its next policy meetings.

Bernanke also said the Fed needed to see more signs of recovery in the U.S. economy before scaling back its stimulus, but investors focused less on those comments.

Bullard, speaking in London, said the U.S. economy was improving but he would like to be sure inflation was heading back towards target before the Fed started winding down its support program.

via Reuters

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