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The Fed Tries to Start Mopping Up Its Mess

1 min read

The Fed Tries to Start Mopping Up Its Mess

Yeah right. That stuff stains fabrics, good luck with the clean up project.


The Federal Reserve’s exit strategy may leave traditional rate hikes until 2012, said James Bullard, the president of the St. Louis Federal Reserve. The Fed may focus initially at mopping up the money that it has poured into the markets to keep credit flowing, he said “You could take back some of the quantitative easing, not in a really rapid way, but in a slow way as the economy improves — that might be a helpful way to proceed while you are waiting for the day to raise interest rates,” Bullard said in an interview with Fox Business News. On any decision to raise the Fed funds rate, Bullard said: “If you look at…how the FOMC has behaved in the past, it’s been two-and-a-half to three years before we’ve raised rates after the end of a recession. So if you think the recession ended in the summer of 2009, two-and-a-half years later is a long ways — it’s all the way to 2012,” Bullard said.

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