The U.S. economy is expected to see a boom that will send the unemployment rate into the 4 percent range, a top Federal Reserve official said on Wednesday.
St. Louis Fed President James Bullard said that it is always possible the economy could see a shock that hurts growth and kills the recovery. But the policy hawk said
the U.S. economy is expected to maintain 3 percent growth in the medium term and that interest rates should reflect this.
"You want the rate path to be set appropriately for the coming boom period in the U.S. economy," Bullard said in remarks during a Hyman Minsky Conference. Earlier in his remarks he said now may be the time for the Fed to raise interest rates.
St. Louis Fed President James Bullard said that it is always possible the economy could see a shock that hurts growth and kills the recovery. But the policy hawk said
the U.S. economy is expected to maintain 3 percent growth in the medium term and that interest rates should reflect this.
"You want the rate path to be set appropriately for the coming boom period in the U.S. economy," Bullard said in remarks during a Hyman Minsky Conference. Earlier in his remarks he said now may be the time for the Fed to raise interest rates.
"A risk of remaining at the zero lower bound too long is that a significant asset market bubble will develop, he said in prepared remarks.
Bullard, a policy hawk who has long called for the Fed to begin hiking rates, repeated his view that the Fed should not wait to raise short-term borrowing costs.
"Now may be a good time to begin normalizing U.S. monetary policy so that it is set appropriately for an improving economy over the next two years," Bullard said. He added that "even with some normalization, monetary policy will remain exceptionally accommodative."
Bullard is not a voting member on the Fed's policy-setting committee this year.
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