Fed's Bullard says policy is at proper place

WASHINGTON (MarketWatch)
Monetary policy is appropriately ultra-easy given the macroeconomic situation, said James Bullard, the president of the St. Louis Federal Reserve Bank on Friday
In a speech on the outlook to a business group in Little Rock, Ark., Bullard said the Fed could respond "to a significant deterioration" to the economy
But he said the Fed "may be trying to do too much with monetary policy," risking monetary instability in the U.S. and around the world
The near-zero rate policy has been in place for more than three years and is projected for several more, he noted
This is far beyond the typical recession and recovery discussed in academic literature, he said
While the policy has been appropriate so far, it could "reignite a 1970s-type experience globally" if pursued too aggressively, Bullard said
This era included four recessions in 13 years, double-digit inflation and double-digit unemployment
The lesson is clear, he said: "Do not let the inflation genie out of the bottle." Bullard said labor market policies would be better than Fed rate policy to bring down unemployment