The New York Times
Thu, July 29, 2010 -- 12:24 PM ET
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Fed Board Member's Deflation Warning Hints at Policy Shift
James Bullard, the president of the Federal Reserve Bank of
St. Louis, warned on Thursday that the Fed's current policies
were putting the American economy at risk of becoming
"enmeshed in a Japanese-style deflationary outcome within the
next several years."
The warning by Mr. Bullard, who is a voting member of the Fed
committee that determines interest rates, comes days after
Ben S. Bernanke, the Fed chairman, said the central bank was
prepared to do more to stimulate the economy if needed,
though it had no immediate plans to do so.
A subtle but significant shift appears to be occurring within
the Federal Reserve over the course of monetary policy, amid
increasing signs that the economic recovery is weakening. Mr.
Bullard had been viewed as a centrist, and associated with
the camp that saw inflation, the Fed's historic enemy, as a
greater threat than deflation.
Read More:
http://www.nytimes.com/2010/07/30/business/economy/30fed.html?hp&emc=na
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