Fed's Bullard says "nervous" about persistently low inflation

Mon Jun 10, 2013 10:49am EDT
 
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MONTREAL, June 10 (Reuters) - A senior U.S. central banker said on Monday he is getting "a little bit nervous" that inflation is showing no signs of heading back towards the target and the Fed's bond purchase program should not be tapered until there is a turnaround.

"What's not encouraging in this picture is that it's (inflation) just going down and so far it hasn't moved back at all. So I would have expected our very aggressive purchase program to turn that process, inflation expectations would go up and actual inflation would follow behind, which is what happened in the QE2 period," said St. Louis Fed President James Bullard .

"So far that hasn't happened, so I'm still waiting for that to happen and I'm getting a little bit nervous," he said in a question and answer session after a speech in Montreal.