Bullard Warns Against Addressing a Gap that Can’t be Filled

The head of the St. Louis Federal Reserve has become one of the prime critics of the Fed’s current loose money policy although his criticism has been restricted to speeches as he is not currently a voting member of the FOMC. His basic assertion is that the Fed is operating from the wrong set of premises and that this will make the economy suffer long term.

The theory is that central banks can use a loose policy that features low interest rates to close the gap between what an economy can potentially do and the actual performance of that economy. The Fed has been on that quest since 2009. Bullard asserts that[This content is for MEMBERS ONLY. Please click Subscribe in the upper right corner to continue.]

Posted by karen on Feb 8 2012. Filed under Geopolitics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry