Fed's Bullard: don't see support for negative rates

FRANKFURT Tue May 21, 2013 12:56pm EDT

FRANKFURT (Reuters) - There is not sufficient support to take interest rates into negative territory in the United States, a top Fed official said on Tuesday.

St. Louis Fed President James Bullard said such a policy of negative rates would run out of road after one or two cuts.

"You could go negative and I have advocated that, but I just don't think there is enough support at this point to go in this direction. I have described it in the past as a dead-end policy," Bullard said after giving a lecture at Frankfurt's Goethe University.

The Fed has an official 2-percent inflation target and has said it will keep benchmark interest rates near zero until unemployment falls to at least 6.5 percent, as long as inflation expectations do not breach 2.5 percent.

(Reporting by Eva Kuehnen and Paul Carrel)

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