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St. Louis Federal Reserve President James Bullard said Tuesday that that the middle part of the country has done a little bit better in picking back up after last year's financial collapse, though the effects of the recession remain serious in all parts of the country.
Speaking with CNBC's Maria Bartoromo, Bullard said that he expected the economy to continue to grow through the rest of the year, and also expects growth above the long run average in 2010.
He said that if his expectations ring true, the U.S. should start adding jobs in 2010.
Bullard went on to say that he does not think the economic recovery is slowing down, and said that it was important for the Fed to think about how it will unwind its balance sheet, and that unwinding should focus on more than just raising interest rates.
He later added that the large size of the Fed's balance sheet does present a medium-term inflation risk that the Fed should keep in mind.
The St. Louis chief, who will be a voting member of the Fed's Federal Open Market Committee in 2010, said that the Fed should keep its asset purchase program open and also look to sell its assets.
He added that the Fed's action on exiting its accommodative monetary policy depends on how the economy evolves in 2010.
Speaking about financial reform, Bullard said that institutions considered "too-big-to-fail" could no longer be allowed that distinction, though he disagreed with creating another government agency to oversee the "too-big-to-fail" problem, saying that the Fed's record on regulating such large institutions has been "quite good" through its history.
Bullard also defended the Fed's independence and power, saying that the central bank's regulation and monetary policy must be "intimately involved" with each other in order to be as effective as possible.
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