Jobs need to improve for stimulus exit: Fed's Bullard

 @ibtimes
on January 08 2010 6:48 AM

It would be good to see more improvement in the U.S. job market before exiting some stimulus programs, a top U.S. Federal Reserve official said on Friday.

James Bullard, president of the St. Louis Federal Reserve Bank, said the U.S. economy was improving but some policies put in place to support the recovery should not be withdrawn yet.

We haven't even seen a positive jobs report in the U.S. economy. We'd like to see at least one month of positive jobs growth, he told students at a university forum in Shanghai.

We would like to see that turn around. We'd like to see unemployment stabilize and other elements of the real economy move into positive territory so that you've got strong growth in 2010, he said.

The Fed has chopped interest rates to near zero and pumped hundreds of billions of dollars into the financial system to guide the world's largest economy through the worst crisis since the Great Depression.

A U.S. government report due later on Friday is expected to show the economy stopped shedding jobs in December for the first time since it fell into recession two years ago.

Bullard, who votes on the U.S. central bank's policy-setting Federal Open Market Committee (FOMC) this year, added that uncertainty about inflation was mounting in the United States, although price pressures remain subdued.

Inflation remains low in the U.S., but inflation uncertainty is higher than before.

He also said that low, stable inflation was good for the dollar.

The dollar policy is actually the policy of the U.S. Treasury, not the policy of the Federal Reserve. Our job is to keep inflation low and stable. I would think that if we kept inflation low and stable, that that would be very helpful to the dollar, he said.

(Reporting by Jacqueline Wong; Editing by Toby Chopra)

Share this article

More News from IBT MEDIA