Fed’s Bullard Fears Severe Inflation Period by 2013

Fed’s Bullard Fears Severe Inflation Period by 2013

A recent report has revealed that President James Bullard from Federal Reserve Bank of St. Louis fears the recurrence of inflation period by late 2013.

As per his statement, inflation is a problem that continues to stay for years, once it arrives. He said that it is important for a nation to timely solve the issue by following strict monetary policies.

Bullard said that policy makers often fail to pick turning points, thereby risking the economy to face inflation for a long span. He told that Paul Volcker, a former Fed chairman, had an extended fight with inflation that went from 1979 to 1987.

While on the one hand, he has been pointing towards the risk of the same by next year because of the current U. S. monetary policy. Fed policy makers on the contrary, suspect whether or not they should introduce more stimulus. It is being said by them that U. S. economy has seen growth over years as well as cut in the unemployment rate.

Additionally, Joerg Asmussen, European Central Bank board member in Germany has also been recommending that policy makers should plan the exits from easy monetary policies now only. "Clearly it is still too early to begin, but we must start to carefully prepare the exit", he added.

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