Federal Reserve Bank of St. Louis President James Bullard said the Fed probably won’t begin a new round of bond purchases following “encouraging” data showing the U.S. economy gained 200,000 payroll jobs in December.
“Hopefully, we will keep this momentum going in 2012,” Bul lard told reporters Saturday after a speech in Chicago.
“The tone of the data has been very strong” and the central bank “probably could wait and see for now” before deciding whether there is a need for more accommodation, he said.
Policymakers are divided over whether they should see if the economy deteriorates before taking additional steps to try cutting borrowing costs and boosting job creation.
The U.S. economy is growing moderately amid “apparent slowing” in global growth, with “some improvement in overall labor market conditions,” Fed officials said last month. The unemployment rate fell to 8.5 percent from 8.7 percent in November, figures from the Labor Department showed last week.
“The jobs report was encouraging, and I’m hopeful that this is a harbinger of more robust activity” in the U.S. economy, Bullard said. A third round of quantitative easing is not “very likely right now,” and officials need to weigh the benefits and the costs of such a move.
In addition, forecasters have been “a bit too pessimistic about the U.S. economy,” Bul lard said after speaking to the Korea-America Economic Association. “The best forecast is the momentum will continue.”
Bullard, 50, who doesn’t vote on monetary policy this year, was the first Fed official in 2010 to call for a second round of asset purchases.
He joined the St. Louis Fed’s research department in 1990 and became president of the regional bank in 2008. His district includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
