WASHINGTON — St. Louis Federal Reserve Bank President James Bullard, in a CNBC interview from Jackson Hole Friday, said the Fed doesn't have to be in a hurry to taper, adding that labor markets are better than they were a year ago, but that GDP growth remains weak.
"I don't think we have to be in any hurry in this situation," Bullard said about the decision to pull back on the Fed's buying of $85 billion a month of U.S. Treasury and mortgage bonds.
"Inflation is running low, you've got kind of mixed data on the economy, so I'd be cautious," he said. "I wouldn't want to pre-judge the meeting, but I think we want to take our time, assess what's going on, before we make a move here."
Bullard added that the labor market is doing better than it was last year at this time, but "GDP growth has been kind of weak. Then inflation has been real low, and I've wanted to see some evidence that it was at least coming back towards target, but I think we can afford to very deliberate in our decision here," he said.
Bullard, who is a voter this year on the Fed's policy making committee, said the Fed's quantitative easing program has been good for financial markets, but the spillover effects into the real economy are harder to gauge.
"There's a lot of things that are really hard to get at to link the financial market effects to the real economy effects," he said.
Asked about the separation between the decision to taper and the decision to raise interest rates, which the Fed has been trying to emphasis in weeks, Bullard said "they are tied together in the mind of the markets. It's separate in our head, but I think markets want to look at the entire picture of accommodation."
And on the increasingly political race to chair the Fed, Bullard said, "The two mentioned a lot are very good economists and would a good job," referring to Vice Chair Janet Yellen and Former Treasury Secretary Larry Summers.
Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See
