The Federal Open Market Committee should adopt a "thresholds" approach to monetary policy, whereby it would set levels for inflation and unemployment that would indicate a change in monetary policy rather than using a date to avoid sending "pessimistic signals," according to James Bullard, president and CEO of Federal Reserve Bank of St. Louis.

By setting "thresholds," or levels for inflation and unemployment, the FOMC wouldn't be predicting the economy will fare poorly through mid-2015, Bullard said, according to prepared slides of his presentation to the Little Rock Regional Chamber of Commerce.

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