<p>Madison – The Federal Reserve Board is done cutting interest rates for at least a while, the president of the Federal Reserve Board of St. Louis strongly hinted here Friday.</p>
<p>Speaking at a conference on housing at the University of Wisconsin-Madison, James Bullard said the aggressive cutting by the Fed since last August has stabilized the economy and that inflation is becoming a larger concern.</p>
<p>“Growth has indeed been slow, at least for the first half of 2008, but that cannot now be justification for further rate reductions,” he said. “Surprises to forecasts of economic activity, if any, have been to the upside.”</p>
<p>Bullard became president of the St. Louis Fed in March and as such sits on the Federal Reserve’s Open Market Committee, which sets short-term interest rates. However, he does not have a vote on the panel this year.</p>
<p>Bullard noted that the rate cutting so far, coupled with the ongoing program of direct fiscal stimulation through tax rebates, is just beginning to be felt in the economy. That, too, is a reason to be careful about additional rate cuts now, he said.</p>
<p>“My sense is that the U.S. economy will be able to post stronger growth in the second half of this year despite the ongoing financial crisis and the drag from the housing sector,” he said. “Such growth is likely to make the inflation outlook a more pressing concern for the Fed in the second half of this year.”</p>