St. Louis Fed President James Bullard told Bloomberg TV that the Fed should consider delaying the end of quantitative easing in repsonse to tumbling inflation expectations.
His concern was tumbling inflation expectations.
The Fed is currently in the process of tapering and ending its third round of quantitative easing, a monetary stimulus program involving the purschase of Treasury and mortgage-backed bonds.
Bullard was basically echoing the concerns of San Francisco Fed President John Williams, who suggested the Fed may have to increase its asset purchase program.
“If we really get a sustained, disinflationary forecast … then I think moving back to additional asset purchases in a situation like that should be something we should seriously consider,” Williams told Reuters.
By inflation expectations, Bullard seems to be referring to breakeven rates, which are inflation expectations implied by the bond market.
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