St. Louis Federal Reserve Bank President James Bullard said Thursday that the low inflation rate gives the Fed's policymaking Federal Open Market Committee "room to maneuver" on the size of the Fed's balance sheet, repeating comments he has made recently.

But Bullard again said the FOMC should be prepared to incrementally change the size of Fed asset purchases as the economy evolves, not just automatically continue to buy $85 billion a month of Treasury and mortgage-backed securities as it is now doing.

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