Quantitative easing has been an effective tool, but with the economy improving the debate becomes whether to complete it or taper it off, St. Louis Federal Reserve Bank president James Bullard said Thursday.

The second round of quantitative easing — a policy of the Fed buying about $75 billion of Treasury securities a month through mid-2011 — was implemented because the Fed funds rate target was close to zero. Such policy "is an effective tool when the policy rate is near zero," Bullard said.

"Even before this action, monetary policy was ultra-easy," he said, with the policy rate near zero for an "extended period" and the Fed's balance sheet much larger than it was before the crisis.

According to Bullard, before the November Federal Open Market Committee meeting, the policy change had been largely priced into markets and the financial market effects were conventional.

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