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Jobless drop will force Fed to more 'traditional' policy -Bullard
February 12, 2014 / 2:10 PM / in 4 years

Jobless drop will force Fed to more 'traditional' policy -Bullard

NEW YORK, Feb 12 (Reuters) - The Federal Reserve will probably have to return to more “traditional” policy-making now that the U.S. jobless rate has fallen to 6.6 percent, so close to the U.S. central bank’s existing threshold for considering an interest-rate rise, a top Fed official said on Wednesday.

St. Louis Fed President James Bullard, speaking on a panel at the New York Stock Exchange, said he expects the Fed to adjust its so-called forward guidance and have to “make more qualitative judgments” on when to tighten policy.

As it stands, the Fed has said it expects not to raise benchmark rates until well after the unemployment rate falls below 6.5 percent, especially if inflation remains below target. Joblessness has fallen to 6.6 percent last month from 7.9 percent a year earlier - a drop Bullard called “dramatic.”

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