LONDON — St. Louis Federal Reserve President James Bullard, who has previously talked about rate hikes starting in the middle of next year, insisted in a CNBC interview Friday that policy will be easy for a long time.
Bullard said policy is easier now than it was last year and was set to remain supportive. He downplayed the perceived hawkishness in the latest Fed minutes.
"Fed policy is very easy and it is going to stay easy for a long time. That is my main message this morning," Bullard said.
The minutes mentioned future tightening but Bullard shrugged it off.
"There was talk about how we are going to handle the future but if you look at things right now we are buying at USD85 billion a month pace, that is a very aggressive pace. I think policy is much easier than it was last year because I think that the outright purchases are a more potent tool than the twist program was," Bullard said.
Bullard also stressed that the Fed's new guidance on rates was providing more effective stimulus, via its assurance to economic agents that rates won't rise until there is valid improvement in labor markets.
The Fed governor also pointed to the reduction in global economic uncertainty as another factor making for greater policy accommodation than was the case at this time year.
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