Precursor For QE3?
Did James Bullard just open the door for a potential QE3?
The St. Louis Fed President said today that the Federal Reserve should keep interest rates on hold for some time after the end of QE2, to see how the economy has been affected by it.
"This gives the committee more time to assess economic conditions," Bullard said in prepared slides. Reuters was able to obtain the slides before Bullard spoke in Washington.
Bullard did not mention anything about another round of asset purchases, but he did say that rates should be kept near zero, and the language in the statement should remain the same for some time.
"Increases in oil prices like the ones we have recently experienced have occurred many times in the past without seeming to have much effect on the economy," Bullard said.
"Headline inflation is the ultimate objective of monetary policy with respect to prices," Bullard said.
