NEW YORK – Despite signals of a “global slowdown,” and mixed economic data in the U.S., the Federal Reserve should continue its “wait-and-see” approach to monetary policy, Federal Reserve Bank of St. Louis President James Bullard said Tuesday.

“The outlook for 2012 has not changed significantly so far,” with expectations for GRP growth to pick up in the last half of the year, he explained during an event jointly hosted by the Bipartisan Policy Center’s Housing Commission and the Jack Kemp Foundation, according to a Fed release.

With European fiscal stress pushing U.S. interest rates down, Bullard suggested, “One possible FOMC strategy is to simply pocket the lower yields and continue to wait-and-see on the U.S. economic outlook.”

Noting “current policy is already very easy, as the policy rate remains near zero and the balance sheet remains large … a change in U.S. monetary policy at this juncture will not alter the situation in Europe,” Bullard stated.

While non-farm payrolls have disappointed in the past few months, it will not “substantially alter the contours of the U.S. outlook,” adding that part of the problem may be seasonal adjustment factors.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.