The U.S. economy is recovering and monetary policy remains accommodative, but the crisis in Greece needs to be watched because it is already causing volatility in world markets, Federal Reserve Bank of St. Louis president James Bullard said yesterday.

Bullard also reiterated the need “for regulatory reform that enhances the Fed’s regulatory authority and maintains its ability to remain at arm’s length from politics.”

“We are seeing continued signs of recovery for the U.S.,” Bullard said in his presentation to the Tennessee Department of Financial Institutions, according to prepared remarks released by the Fed.

He pointed to real gross domestic product, which “has surpassed pre-crisis levels and is expected to reach its 2008 second-quarter peak before the end of this year.”

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