Fed's Bullard: deflation risk has risen

TOKYO Thu Jul 29, 2010 9:24pm EDT

St. Louis Federal Reserve Bank President James Bullard is seen in this undated handout photograph. REUTERS/St. Louis Federal Reserve Bank/Handout

St. Louis Federal Reserve Bank President James Bullard is seen in this undated handout photograph.

Credit: Reuters/St. Louis Federal Reserve Bank/Handout

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TOKYO (Reuters) - St. Louis Federal Reserve Bank President James Bullard said the risk of deflation in the United States has risen somewhat compared with the beginning of this year, the Nikkei newspaper reported.

Bullard, a voter on the Fed's policy-setting panel this year, said while there was no imminent need to ease monetary policy, the central bank would need to act if the U.S. economy worsens significantly, according to an interview that ran on Friday.

He reiterated that the most likely option in easing monetary policy is to buy more long-term Treasury securities, adding that there was room to influence medium- to long-term interest rates.

(Reporting by Leika Kihara)

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