MADISON, Wis., Jan. 10 (Reuters) - A top U.S. Federal Reserve official on Thursday predicted strong U.S. economic growth of 3.2 percent for this year and for 2014, crediting in part the central bank’s recent policy easing for the better outlook.
St. Louis Fed President James Bullard, a voting member this year on U.S. monetary policy, said he also expects unemployment to drop over the next two years, while inflation should remain near the Fed’s 2 percent target rate.
According to remarks prepared for delivery to the Wisconsin Bankers Association, Bullard cited an easing of policies over the last six months, as well as reduced economic headwinds and uncertainty, for a pick up in real gross domestic product.
The Fed is now buying $85 billion in bonds per month under a quantitative easing program that it can adjust at any time. The purchases are meant to kick-start growth and ratchet down unemployment, which stood at 7.8 percent last month.
Bullard, a centrist who nonetheless is toward the hawkish end of the spectrum of policymakers, said that in the months ahead the Fed will make judgments on asset purchases based on economic data. It could “taper” the program, he added.