Published May 23, 2013
LONDON – A top U.S. central bank official sought to reassure financial markets that the Federal Reserve was not in a hurry to start winding down its economic stimulus as investors worried about comments by its chairman Ben Bernanke.
James Bullard, president of the Federal Reserve Bank of St. Louis, said on Thursday he did not think the Fed was "that close" to starting the process of winding down its support.
Share prices around the world fell sharply after Bernanke said on Wednesday that the U.S. central bank may start to trim its bond purchases at one of its next policy meetings.
Bernanke also said the Fed needed to see more signs of recovery in the U.S. economy before scaling back its stimulus, but investors focused less on those comments.
Bullard, speaking in London, said the U.S. economy was improving but he would like to be sure inflation was heading back towards target before the Fed started winding down its support programme.
"I think the chairman, as he always does, said the right thing which is it depends on the data," Bullard, a current Fed voting member, said.
A top European policymaker also said on Thursday it was not yet time for either the Fed or the European Central Bank to consider reining in support for their economies.
"I think the policy followed by the ECB as well as, for instance, the Fed in the United States is appropriate for the current economic situation, but of course always with the perspective that one has to adjust to further developments," ECB Governing Council member Ewald Nowotny said in Vienna.
(Reporting by Marc Jones in London and Michael Shields in Vienna; Editing by Toby Chopra, John Stonestreet)