Bullard: No Change In Policy

James Bullard (FRB-SL), a voting member of the FOMC, spoke at a forum on monetary policy today at Jackson Hole. His remarks are summarized on the FRB-SL website. The key point: “Bullard noted that the FOMC recently authorized Fed Chairman Ben Bernanke to discuss possible plans for the ‘tapering of QE,’ which refers to reducing the pace of asset purchases. ‘The financial market reaction has been substantial, even though the Committee has not actually changed any policy settings at this point,’ Bullard said.” Here’s more from the post:

Current U.S. monetary policy has three components: the policy rate, forward guidance and asset purchases, he said. The policy rate has been near zero since December 2008. Forward guidance is a promise to keep that rate near zero at least until unemployment falls below 6.5 percent or inflation rises above 2.5 percent. Asset purchases of Treasury securities and mortgage-backed securities are continuing at $85 billion per month until there is substantial improvement in the labor market, as stated by the FOMC.