PALM BEACH Fla. (Reuters) - The U.S. Federal Reserve did not react quickly enough to economic developments in its last tightening cycle in 2004-06, a top Fed official said on Monday.
“I think the ‘04-06 cycle was too methodical and did not react sufficiently to economic developments,” Bullard said, explaining that the pace of hikes seemed too set on a calendar schedule.
“So, the committee was tightening policy, but the bubble was nevertheless developing under our noses,” he told a banking group in Palm Beach, Florida.
Bullard added that the ideal strategy for future Fed rate increases is one that is not disruptive like the tightening in 1994, and one that is more reactive to economic conditions than in 2004-06.
Reporting by Michael Flaherty; Editing by Andrea Ricci