Federal Reserve should consider delaying its bond purchase: James Bullard

NEW YORK: The Federal Reserve should consider delaying the end of its bond purchase programme to halt the decline in inflation expectations, said St Louis Federal Reserve Bank president James Bullard.

Speaking in an interview on Thursday with Bloomberg News, Bullard said US economic fundamentals remain strong and he blamed the market turmoil on downgrades in the outlook for Europe. "Inflation expectations are declining in the US," he said. "That's an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE."

Fed officials are scheduled to next gather on October 28-29 and have said they expect to end asset purchases after that meeting.

US 10-year treasury yields fell below 2 per cent on Wednesday for the first time since June 2013 as weaker-than-forecast economic data added to concerns that economic growth is slowing. Concern about global growth has helped push down stocks, oil prices and measures of inflation expectations, while increasing the value of the US dollar relative to trading partners.