Federal Reserve Bank of St. Louis President James Bullard said the central bank should continue its bond buying because it’s the best available option for policy makers to boost growth that is slower than expected.
The purchases known as quantitative easing should be maintained because financial markets indicate that they are improving financial conditions and can be adjusted based on how the economy changes, Bullard, who votes on the policy-setting Federal Open Market Committee this year, said today according to the text of remarks prepared for delivery in Frankfurt.
“Quantitative easing is closest to standard monetary policy, involves clear action and has been effective,” Bullard said. The panel should continue the program while “adjusting the rate of purchases appropriately in view of incoming data on both real economic performance and inflation.”
Fed officials are debating how and when to eventually curtail the purchases that have expanded the central bank’s balance sheet to a record $3.35 trillion. The FOMC said May 1 it will keep buying $85 billion in Treasuries and mortgage bonds per month to boost employment and spur the economy.
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