Fed's aggressive stance makes Bullard 'a little bit nervous'

MADISON, Wis., Jan. 10 Thu Jan 10, 2013 3:45pm EST

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MADISON, Wis., Jan. 10 (Reuters) - St. Louis Fed President James Bullard, a voting member this year on U.S. monetary policy, expressed discomfort with the Fed's current super-easy policy and predicted the central bank could raise short-term interest rates in mid-2014.

"It is a very aggressive policy and it is making me a little bit nervous that we are overcommitting to the easy policy," he told reporters after a speech here.

But unemployment, now at 7.8 percent, is likely to fall to the key level of 6.5 percent by the middle of next year, he said, citing a pattern of improvement in the rate over the past three years that he expects to continue.

"Yes, that would cause the committee to rethink its interest rate policy, but it would be for a good reason, because there would be substantial improvement," he said.

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