Bullard: Fed policy-exit debate key issue in 2011 (by William L. Watts)

LONDON (MarketWatch) -- The debate over the Federal Reserve's exit from ultra-accommodative monetary policy is likely to be a key issue in 2011 and might not wait until rising global macroeconomic uncertainties are resolved, St. Louis Federal Reserve Bank President James Bullard said Tuesday in Prague. Bullard said sources of uncertainty include turmoil in the Middle East, the impact of Japan's earthquake, the U.S. fiscal situation, and Europe's sovereign-debt crisis. "The process of normalizing policy, even once it begins, will still leave unprecedented policy accommodation on the table," Bullard said, according to a summary of his remarks at a banking forum. The Federal Open Market Committee "may not be willing or able to wait until all global uncertainties are resolved to begin normalizing policy." If uncertainties escalate, the question of how and when to exit policy will become less clear, said Bullard, who isn't a voting member of the FOMC this year. "Still, the most likely prospect is that all four are resolved without becoming global macroeconomic shocks," he said.