Fed’s Bullard says EU debt crisis will help US achieve its bullish forecasts

City A.M. Reporter
SAFE-HAVEN flows to the United States triggered by concerns about the Eurozone debt crisis will be beneficial for the United States, St. Louis Federal Reserve President James Bullard said yesterday.

At an economic seminar in London, he added that this would help the US economy achieve its growth forecasts for the next few years, provided there was no “serious” contagion from debt problems plaguing Greece.

“The US will be an unwitting beneficiary from the crisis, much as we were in the Asia crisis,” he said.

“Even though it will not be the greatest for Europe ... flight to safety will be good for the US.

Answering questions on monetary tightening, Bullard said he believed that withdrawing some quantitative easing first, before raising interest rates, would be a natural first step. But he acknowledged that others would prefer to hike rates initially.

He said that the Fed’s quantitative easing program had been “very successful,” and that it would possibly be used again in future.