Bullard Says Zero Policy Rate Risks Asset-Price Bubbles

Federal Reserve Bank of St. Louis President James Bullard repeated his call for beginning to normalize monetary policy and said maintaining interest rates near zero risks destructive asset-price bubbles.

“A risk of remaining at the zero lower bound too long is that a significant asset-market bubble will develop,” Bullard said in prepared remarks in Washington on Wednesday. “If a bubble in a key asset market develops, history has shown that we have little ability to contain it,” he said, citing the housing bubble that preceded the last recession.

Read more: http://www.bloomberg.com/news/articles/2015-04-15/fed-s-bullard-says-zero-policy-rate-risks-asset-price-bubbles