Fed President Bullard: Near-Zero Interest Rates Until 2012

Balloon Boy

While this Fed President can’t actually vote this year, he’ll be able to next year.

Bloomberg: Federal Reserve Bank of St. Louis President James Bullard said policy makers may not start to raise rates until early 2012 while facing a “too low for two long” argument that may “weigh heavily” on the central bank.

The Fed’s “main issue” will be how to avoid spurring inflation while adjusting its $1.725 trillion in asset purchases, a main tool in its effort to sustain economic growth, Bullard said today in the text of slides for a St. Louis speech.

He also adds to the ‘lower for longer’ view of people such as David Rosenberg who believe that interest rates will remain low for a while.

Yet stocks and commodities probably won’t complain. Bonds won’t either at first, until they realise what it could mean for future inflation.

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