Fed’s Bullard: Time Is Right to Pull Back on Central Bank Stimulus

Federal Reserve Bank of St. Louis President James Bullard is ready to start slowing the pace of central bank bond buying as soon as his colleagues are, worried in part that the purchases risk overheating the gangbusters housing market.

“I think with the economy growing at 7% and the pandemic coming under better and better control, I think the time is right to pull back emergency measures,” Mr. Bullard said Monday in an interview with The Wall Street Journal.

When it comes to the outlook for the Fed paring its purchases of Treasury and mortgage bonds, “we do want to do it gently and carefully, but I think we’re in a very good position to start a taper. I don’t need to get going tomorrow, but I think we’re—I think we’re in very good shape for this” once the collective membership of the Federal Open Market Committee is ready to act, Mr. Bullard said.

Some $40 billion a month of the purchases target mortgage backed bonds. Some Fed officials have openly questioned continuing those purchases given the strength of the housing market, and some are ready to start paring the asset buying.

Mr. Bullard does not believe the housing sector is in a bubble and wants to ensure it stays out of trouble.