In the Media | April 2015

Bullard Says Zero Policy Rate Risks Asset-Price Bubbles

By Steve MatthewsChristopher Condon
Bloomberg, April 15, 2015. All Rights Reserved.

Federal Reserve Bank of St. Louis President James Bullard repeated his call for beginning to normalize monetary policy and said maintaining interest rates near zero risks destructive asset-price bubbles.

“A risk of remaining at the zero lower bound too long is that a significant asset-market bubble will develop,” Bullard said in prepared remarks in Washington on Wednesday. “If a bubble in a key asset market develops, history has shown that we have little ability to contain it,” he said, citing the housing bubble that preceded the last recession.

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