James Bullard, president of the Federal Reserve Bank of St. Louis, said the U.S. economy is improving enough to withstand an increase in short-term interest rates next year as growth picks up.
“I’m starting to think the economy could tolerate at least a little bit of the central bank getting back to a more normal stance,” Bullard, who favors raising the benchmark rate in the first quarter of 2015, said at an event today in New York.
The Federal Open Market Committee is closer to its goals for full employment and low and stable inflation than many investors realize, Bullard said. He predicted the pace of economic growth will accelerate to 3 percent this year after an unexpectedly deep first-quarter contraction.
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