U.S. Unemployment Seen Below 6% by Year's End
HONG KONG--The U.S. unemployment rate should fall below 6% by the end of 2014, St. Louis Federal Reserve President James Bullard said Wednesday at an investor conference in Hong Kong.</br></br>Mr. Bullard, a member of the policy-setting Federal Open Market Committee, said the U.S. economy is improving and unemployment had fallen much more quickly than many people expected.</br></br>The Fed had previously committed to keeping short-term rates low well past the time when the unemployment rate fell below 6.5%, especially if inflation remained below 2%. The unemployment rate stood at 6.7% in February, while inflation has failed to rise significantly and economic growth remains fragile.</br></br>That pushed the Fed at its policy meeting last week to drop reference in its regular statement to the unemployment threshold. Instead, the statement said rates will stay low for a considerable time after the Fed's bond-buying program ends.</br></br>Mr. Bullard, speaking at a conference organized by Credit Suisse, said the FOMC from now on would use "more standard" and "qualitative" language rather than relying on quantitative thresholds to guide market expectations of future rate decisions.