Massive asset purchases are the closest thing to normal monetary policy once interest rates get near zero, a senior Federal Reserve official said Tuesday, recommending that the European Central Bank weigh such action if inflation falls further.
St. Louis Federal Reserve Bank President James Bullard, a voting member of the Fed’s policy-setting committee, also said the U.S. central bank should keep buying bonds, while adjusting the pace of purchases up or down based on incoming economic data.
“Quantitative easing is closest to standard monetary policy, involves clear action and has been effective,” Bullard said in remarks prepared for an economics lecture at the Goethe University in Frankfurt.
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