March 30, 2011 / 9:59 PM / in 8 years

Fed's Bullard: No consensus on cutting short QE2

LONDON, March 30 (Reuters) - St. Louis Federal Reserve chief James Bullard said on Wednesday he did not think a consensus was forming on the Federal Open Market Committee to cut short the United States’ second programme of quantitative easing.

Bullard, who does not have a vote on Fed policy this year, has said the $600 billion dollar programme could be trimmed by some $100 billion, but he said his was just one opinion. “Whether I can pull people round to my opinion is up in the air,” he said.

Speaking at a media roundtable after a dinner event in London, Bullard said he favoured reducing the size of the balance sheet before raising rates.

He added that global shocks could cause a reverse of policy and that it was not possible to commit to policy over a long period. He also said he favoured an inflation targeting approach, but that the Fed still had credibility with an “implicit inflation target.”

On the debt problems in the euro zone’s periphery, he said he was “impressed that participants in the euro wanted the euro to succeed.” (Reporting by Jessica Mortimer and Brenda Goh; Editing by Leslie Adler)

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