U.S. Federal Reserve closer to an additional economic stimulus

President of the Federal Reserve Bank of St. Louis, James Bullard said on Friday that the central bank is even closer to stimulate the economy through additional acquisitions, but noted he did not expect that such actions may be necessary.

While economic growth is likely to accelerate in 2011 and there are some signs the completion of a hitch in the restoration, which was observed this summer, the government "should be ready for unexpected events, Bullard said in an interview with reporters and editors of Dow Jones Newswires and The Wall Street Journal.

Commenting on the decision last month by the Committee on Open Market decision to keep the size of the balance at the same level, Bullard said: "I think the Fed has taken steps to have the opportunity to act when necessary to take further action, further actions to mitigate the policy."

"The acquisition of long-term Treasury securities - is the most promising measure that we can take," - he added.

"If the Fed really will take further measures, I do not think that this should be a shock therapy", - said Bullard. Instead, he prefers a more gradual approach to the purchase of Treasury securities, which may be consistent with the incoming data.

"I think we should be ready to act, and I think that the committee is much closer to what had to be prepared than, say, June or May of this year" - said Bullard.

"I do not think it will be necessary to take additional measures," - he added.