Fed’s Bullard: Current level of bond purchases ‘appropriate’
Federal Reserve Bank of St. Louis President James Bullard said on Friday that he sees the current level of bond purchases as “appropriate.”
Bullard stated that monetary policy is part of the general equilibrium and that, as such, it has effects on income, financial wealth and consumption inequality. According to him, the role of monetary policy when credit markets play an important role is to “induce the correct real interest rate period-by-period,” and the real interest rate is the one that would occur if there were no nominal frictions.
Bullard stated earlier he is satisfied with the Fed’s current monetary policy and added he expects the United States economy to improve “possibly more rapidly than financial markets currently think.”
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