- Says recent research suggest U.S. monetary policy may be considerably easier than commonly thought.
- US monetary policy may also be substantially easier than policy recommended by common policy rules.
- Research estimates US monetary policy may be 300 basis points lower than recommended by Taylor Rule.
St. Louis Federal Reserve President James Bullard cited research that calculated a ‘shadow’ estimate for U.S. short-term interest rates of minus-5 percent that, in nominal terms, are currently being held near zero by the U.S. central bank.
“In particular, the current U.S. policy stance may be substantially easier than the policy stance recommended by commonly used monetary policy feedback rules,” Bullard told a corporate finance conference at the Olin Business School at Washington University in St. Louis.
Bullard, viewed as one of the more hawkish Fed officials, will be a voting member of its policy-setting committee in 2013.- Reuters
