Federal Reserve Bank of St. Louis President James Bullard said recent signs of improvement in the economy would prompt him to oppose any new program by the Fed to buy bonds to reduce borrowing costs.
“I wouldn’t do it right now,” Bullard said today in a CNBC interview. “If it was just me and we just have the data up until today I wouldn’t take a decision right now.”
Many Fed policy makers said additional stimulus would probably be needed soon unless the economy shows signs of a durable pickup, according to minutes of their July 31-Aug. 1 meeting released yesterday. Bullard said “the minutes are a bit stale” because “we have some data since then that is stronger.”
Retail sales increased 0.8 percent in July, more than forecast by economists, and companies hired 163,000 workers, the most in five months.
“It would be unusual for the Fed to take action based on this data constellation,” said Bullard, 51, who doesn’t vote on policy this year.
A report today showing the number of Americans filing applications for unemployment benefits rose to a one-month high last week is “consistent with moderate payroll growth” and doesn’t indicate a deterioration, Bullard said.
U.S. and European stocks fell as investors weighed whether central banks will ease monetary policy further amid concern over the euro-area crisis. The Standard & Poor’s 500 Index fell 0.5 percent at 10:07 a.m. New York time.
Fed officials have offered differing policy views this week, with Fed Chicago Bank President Charles Evans endorsing more easing and Atlanta’s Dennis Lockhart saying there are risks to moving “too aggressively.”
“I don’t need to see any more data to know that I think we should have more accommodation,” Evans told reporters today in Beijing, referring to the U.S. “I certainly would applaud anybody who takes action in order to strengthen their economies” around the world, including China, he said.
Fed Chairman Ben S. Bernanke, who last month said a third round of bond buying was an option, will update his policy outlook on Aug. 31 with a speech to the Kansas City Fed’s annual symposium at Jackson Hole, Wyoming.
Bullard said he might favor easing if the U.S. economy were to deteriorate. In that case, asset purchases should be done “month by month” in an open-ended program whose size would depend on the course of the economy, he said.