(Adds Bullard's first name)
By Ann Saphir
CHICAGO Dec 3 The Federal Reserve could replace
its expiring Operation Twist with a smaller program of outright
Treasury purchases and still get the same stimulative effect on
the U.S. economy, the head of the St. Louis Fed told the Wall
Street Journal on Monday.
Under Twist, the Fed buys $45 billion in long-term
Treasuries each month, and sells a like amount of short-term
Treasuries. Many economists believe that policymakers will
decide to buy Treasuries outright next year to make up for the
yearend expiration of Twist.
James Bullard said that it might be too "dovish" to replace
Twist with the full $45 billion in monthly Treasury purchases.
"You could go down to $25 billion in outright purchases and
probably get the same stimulative impact," he told the paper.
The Fed has also been buying $40 billion in mortgage-backed
securities each month to help bring down too-high employment.
The U.S. economy will probably grow at at least a 3-percent
pace in 2013 if the so-called fiscal cliff is averted, Bullard
(Reporting by Ann Saphir; Editing by James Dalgleish)