The Federal Reserve's twin goals of stable prices and low unemployment "are within sight," said James Bullard, the president of the St. Louis Federal Reserve Bank, in a speech to Arkansas bankers on Friday. Bullard holds a vote this year on the Fed's rotational Federal Open Market Committee, charged with setting interest-rate policy.
Using a mathematical formula, Bullard said the Fed is closer to its goals than it has been 60% of the time since 1960. "This helps to justify the Fed's tapering of asset purchases," Bullard said.
In explaining the lag in the economy if, in fact, the Fed is near its goals, Bullard said, "Two reasons: labor markets do not seem to be fully recovered [and] inflation remains low," he said.
Bullard noted that there has been a "tame" reaction in global financial markets this year to the Fed's tapering of asset purchases, especially compared with the turmoil of last summer when the Fed first hinted it was thinking about slowing the pace of its buying.
Stock averages moved little on the release of the speech, remaining down some 0.02% to 0.2% where they've traded for much of the day.
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