Sun, Feb 03, 2013 - Page 13 News List

Fed’s Bullard urges cutting QE pace, if data remain strong


US Federal Reserve Bank of St Louis President James Bullard said he will urge reducing the pace of central bank asset purchases by the middle of the year if US growth picks up.

“We should think about tapering or adjusting the program,” Bullard said yesterday in an interview in Washington. “If you get some good data for a couple of months, maybe you’d say: ‘Okay, we go back to US$75 billion per month instead of US$85 billion or something like that.’”

Bullard backed the Federal Open Market Committee decision this week to continue purchasing securities at the rate of US$85 billion a month, the third round of quantitative easing, after growth stalled last quarter. Policymakers have pushed the benchmark interest rate close to zero and expanded Fed assets to more than US$3 trillion to spur growth and reduce unemployment.

Bullard spoke in yesterday’s interview immediately after the release of last month’s employment data. Payrolls rose 157,000 following a revised 196,000 advance in the prior month and a 247,000 surge in November, US Labor Department figures showed. The jobless rate increased from 7.8 percent.

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