Fed's Bullard sees strong US growth in 2013, 2014

MADISON, Wis., Jan. 10 Thu Jan 10, 2013 2:00pm EST

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MADISON, Wis., Jan. 10 (Reuters) - A top U.S. Federal Reserve official on Thursday predicted strong U.S. economic growth of 3.2 percent for this year and for 2014, crediting in part the central bank's recent policy easing for the better outlook.

St. Louis Fed President James Bullard, a voting member this year on U.S. monetary policy, said he also expects unemployment to drop over the next two years, while inflation should remain near the Fed's 2 percent target rate.

According to remarks prepared for delivery to the Wisconsin Bankers Association, Bullard cited an easing of policies over the last six months, as well as reduced economic headwinds and uncertainty, for a pick up in real gross domestic product.

The Fed is now buying $85 billion in bonds per month under a quantitative easing program that it can adjust at any time. The purchases are meant to kick-start growth and ratchet down unemployment, which stood at 7.8 percent last month.

Bullard, a centrist who nonetheless is toward the hawkish end of the spectrum of policymakers, said that in the months ahead the Fed will make judgments on asset purchases based on economic data. It could "taper" the program, he added.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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