Fed's Bullard sees 'high hurdle' to QE3

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Fed's Bullard sees 'high hurdle' to QE3 (by Greg Robb)

WASHINGTON (MarketWatch) - A decision to launch a third round of bond buying, or quantitative easing, would not be an easy decision for the Federal Reserve, said St. Louis Fed Bank president Jim Bullard on Friday. "QE3 is viewed as still having a pretty high hurdle," Bullard said in an interview on Bloomberg Television. In the wake of Fed Chairman Ben Bernanke's press conference on Wednesday, many Fed watchers have said the Fed is close to QE3. Bullard said he was concerned another round of quantitative easing would be a move further "into uncharted territory" and would be taking more risk on its balance sheet. Bullard said the Fed decided to extend Operation Twist until the end of the year because policymakers thought it would be "imprudent" to allow the program to end right now. Bullard said he thought the Fed would restart some of its programs to provide credit to markets if markets freeze up again due to the European debt and banking crises.

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