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"Prudent policy suggests edging the policy rate and the balance
sheet towards more normal levels," Bullard said in prepared
remarks for a presentation to a monetary policy conference in
Frankfurt, Germany.
Bullard was among the majority of Fed policymakers who voted to
keep rates steady at the central bank's two-day meeting this
week, and he has voiced concern recently about a drop in
inflation expectations.
But those expectations have been moving higher lately, and
Bullard said in his remarks on Friday that he now feels
"inflation net of the oil price shock is reasonably close to
target." He did not in the prepared remarks suggest when the
next rate hike should occur.
The bulk of Bullard's prepared presentation revolved around a
more theoretical discussion of whether the extended period of
low rates in the United States and Europe has, instead of
boosting demand and forcing inflation higher, created a
situation where inflation will remain low until rates are
increased.
(Reporting by Howard Schneider; Editing by Paul Simao)
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