Struggling world markets shudder as Fed sees U.S. recovery, moves to end cash infusions

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U.S. growth, in fact, has averaged only 1 percent in the past three quarters, despite the Fed’s bond-buying campaign, and may not pick up to more solid rates of more than 2 percent as expected by a majority of Fed members next year, he said.

Meanwhile, inflation in the U.S. has declined to the 1 percent threshold below which the Fed considers it to be dangerously low, he said. For that reason, Mr. Bullard said, the central bank should hold off any change in policy until it sees evidence of more solid growth.

Mr. Bullard said he is confident that Mr. Bernanke agrees that the evidence of economic recovery must be more convincing before the Fed acts on its tapering plans.

Charles Plosser, president of the Federal Reserve Bank in Philadelphia, is among of a growing chorus of Fed officials calling for a quick end to the easing programs. He said he does not think the economy needs any further aid and the dangers of keeping such loose money policies in place can be ignored no longer.

“The economy hasn’t exactly boomed because of it,” he said, while the prospects for further major disruptions in global stock and bond markets are growing.

“It’s the law of unintended consequences, if we leave interest rates too low for too long,” he said. “It’s going to be a long, steady, slow slog toward recovery” no matter what the Fed does, he said.

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