Fed’s Bullard wary of ultra-loose policy as economy recovers

• Further Fed policy action may create over-commitment to ultra-loose policy as economy recovers
• Numerous policy actions on the table and affecting economy with a lag, may be hard to remove accommodation at the right pace and right time; must be cautious

Translation: It’s hard to put the inflation horse back in the barn once he breaks loose.

Bernanke would counter that it is harder to reverse deflation once it takes hold (see Japan, the Great Depression) than to slay inflation…