DOW JONES NEWSWIRES
James Bullard, president of the Federal Reserve Bank of New York, told The Financial Times on Sunday that the outlook for inflation is still uncertain, and that the threat of deflation still lingers. Bullard, in an interview posted on the FT Web site, also said the Fed might need to "pivot quickly," once the deflation threat dissipated, and deal with the inflation threat. According to the FT, he said "you have inflation that will be possibly substantially above target over a horizon of two to four years, and that, I think, is because of the ­combination of very large fiscal deficits in the US with very easy monetary policy." But he also said that for the next two years, the focus should be on recovery. "For 2009, in particular, and maybe a little bit into 2010, you have to worry about getting out of the recession, establishing your recovery, making sure the recovery has really taken hold," he said. Once the recovery is established, then the focus can return to inflation. However, Bullard said that while the Fed has historically taken up to three years to raise rates following a recession, this time the possibility that they are creating conditions which could generate "a bubble that really might come back to hurt you later" will weigh on them. Bullard also said he expected growth in the U.S. of 3.5% to 4% next year, and saw unemployment peaking just above 10%. Full story at http://www.ft.com/cms/s/0/8fad3518-ccaa-11de-8e30-00144feabdc0.html
-Dow Jones Newswires; 212-416-2800
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Publié le 09 novembre 2009 Copyright © 2009 Dowjones