St. Louis Federal Reserve Bank President James Bullard said in a speech this morning that the macroeconomic policy actions the Fed took to stimulate the economy at the start of the financial crisis may not be appropriate any longer:
As the U.S. economy continues to rebound and repair, those policy actions may create an overcommitment to ultra-easy monetary policy. The ultra-easy policy has been appropriate until now, but it will not always be appropriate.
Bullard cites the European Central Bank’s long-term financial operations (LTRO) and the “relatively successful” handling of the Greek debt swap as contributors to a lower need for additional stimulus. He also thinks that employment growth in the US and the threat of inflation indicate that the Fed should be wary of continuing its easy money policies.
Bullard’s remarks are available here.