RTTNews - St. Louis Federal Reserve Bank President James Bullard said Thursday that he was cautiously optimistic that the nation has weathered the worst of the economic crisis and that the country would soon begin to see economic growth again.
Addressing an audience at the College of Business at the University of Arkansas-Little Rock, Bullard said that the stabilization of personal spending and smaller job losses are positive signs of improvement, although the recovery remains fledgling.
Bullard said that the Fed's monetary policy will likely remain accommodative in order to keep the recovery on track.
The Fed's main objective during 2007-2009 was to avoid a deflationary experience such as the one experienced during the 1990s in Japan, he said. Monetary policy is still very accommodative and the FOMC intends to keep the Fed funds target near zero for an extended period.
The St. Louis Fed president also discussed ways to wind down the current monetary policy in order to avoid inflation. He stressed the importance of exiting liquidity programs when they expire and gradually ending the asset purchase program by selling assets as appropriate.
Bullard also addressed the independence of the Fed, saying that limiting its freedom would be counterproductive . He added that the central bank would need to remain closely involved in the regulatory structure because it is a lender of last resort.
For comments and feedback: contact firstname.lastname@example.org