James Bullard "Reasonable US Recovery...QE Must End" March Boilerplate - Compare And Contrast

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Federal Reserve Bank of St. Louis President James Bullard addressed members of various financial institutions on Wednesday at the UBS Macro Dinner in London.  He delivered remarks titled “U.S. Monetary Policy and the Path to Normalization.”    

During his presentation, Bullard explained how the Fed’s second round of quantitative easing was “a classic easing of monetary policy” and “an effective tool, even while the policy rate is near zero.”

Bullard also discussed the situation in early 2011, stating that “U.S. growth prospects remain reasonably good for 2011.”  He added that recent global and domestic events “present considerable uncertainty,” but he concluded that “the most likely scenario is that these uncertainties are unwound in relatively benign ways.”  He discussed such a de-escalation scenario for each situation. 

Finally, Bullard talked about the normalization of monetary policy and compared it to previous tightening cycles.  “Discussion of the normalization of U.S. policy will likely return as the key issue in 2011,” he concluded. 

And contrast:

The US is on track for a "reasonable" recovery in 2010, and the corner has been turned in the jobs market, James Bullard, President and CEO of the Federal Reserve Bank of St. Louis, said in a CNBC interview.

Bullard expressed cautious optimism about the US economic outlook and argued for the reversal of quantitative easing before rate hikes as the best exit strategy.

"I think we are on track. I do think we are recovering. We will continue to have positive GDP growth in the first half," he said.

"I think we will get some good months of jobs reports coming up very, very soon," he said.

"I am looking for March to be strong and ... that (strength) will carry on in the couple of months after that," he said.

"I do think we are about to turn the corner on jobs," he added.

"Now it seems like the natural thing is to withdraw the quantitative easing and then as some later point raise interest rates," Bullard said.

He added, however, "I am in a minority on that, but I am working on it."

Bullard said the question was whether policymakers should raise the traditional, short term rate "which is supposed to have an effect on the whole term structure" or should they "sell some mortgage backed securities in a very slow and easy way in order to get the balance sheet back to normal."

Bullard said he favoured the second approach as an exit strategy.

One is from March 30 2011, the other is from March 22, 2010. Guess which is which.