October 5, 2012 / 2:44 AM / 5 years ago

Bullard: Fed risks putting itself in a "box" by targeting unemployment

MEMPHIS (Reuters) - The U.S. central bank risks limiting its policy flexibility by explicitly tying its actions to a numerical unemployment target, a senior Federal Reserve official said on Thursday.

President of the Federal Reserve Bank of St. Louis James Bullard poses during an interview at the Federal Reserve Bank of St. Louis June 8, 2011. REUTERS/Peter Newcomb

“I think this threshold thing will put the committee in more of a box,” said St. Louis Federal Reserve President James Bullard, voicing disagreement with fellow policymakers, referring to the Federal Open Market Committee (FOMC).

Minutes of the FOMC’s September meeting showed that many committee members favor a commitment to lower the jobless rate beneath a certain level before raising interest rates, in order to better communicate its determination to bolster U.S. growth.

Reporting By Alister Bull; Editing by Paul Simao

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