May 24 - St. Louis Federal Reserve President James Bullard thinks the U.S. economy will be strong enough by late 2013 to warrant a rate hike. Conway Gittens reports.
The Federal Reserve meets in late-June and since its last meeting in April the economic recovery has been sluggish. Most notably, job creation has been underwhelming, which has revived talk the Federal Reserve may need to provide additional stimulus, by way of quantitative easing, or QE3. But St. Louis Fed President James Bullard does not think the economy is a weak as some fear. SOUNDBITE: JAMES BULLARD, PRESIDENT, ST. LOUIS FEDERAL RESERVE (ENGLISH) SAYING: "My own view is that the economy will perform a little bit better than some forecasters are expecting and because of that we will end up raising rates in late 2013." In fact, Bullard believes the labor market is healthier than at first glance. SOUNDBITE: JAMES BULLARD, PRESIDENT, ST. LOUIS FEDERAL RESERVE (ENGLISH) SAYING: "I think labor markets have actually been stronger than many have expected over the last six months and unemployment has continued to tick down and so I think we are okay on that score, obviously, we would like more jobs to be created and we would like to get the unemployment rate down further, but I do think we made progress on that dimension, and quite a bit more progress than was expected as of last fall." Bullard admits making economic projections, or forecasts about U.S. interest rates, is difficult given the risks coming out of Europe. That said, he believes Greece could leave the euro zone in an orderly fashion if the transition is handled properly. Conway Gittens, Reuters