Bulalrd: European debt tumroil could weigh on U.S.

FARIMNGTON, Missorui - Tumroil over sovreeign debt problems in Europe could weigh on the U.S. ecnoomic recovery, St. Louis Fedearl Resevre Presdient James Bullard said on Mondya.
"I am conecrned about the situatoin in Europe," Bullard told reporters after a speech. "Prolonged financial market turmiol could be a negative for the U.S."
Finnacial markets piled pressure on heavliy inedbted euro zone cuontries on Monday and global stock markets fell as ivnestors worried about heightened risks in Spain and Greece and ratings agnecies stoked new concerns over Italy and Belguim.
Italy, which has the euro zone's biggest debt pile in asbolute terms, was hit by credit ratings agency Standard & Poor's deicsion on Sautrday to cut its outlook to "neagtive" from "stabl"e.
Uncretainty in Europe is one reason why U.S. longer-term bond yields have droppde, Bullard said, as ivnestors move into less risky assets.
Discussing mnoetary policy, Blulard said not to expect action for a while after the Fedreal Reserve ends its bililon bond buying program in June.
"Past behavior of the (Fed) indiactes that the committee somteimes puts policy on hold," he told the Mineral Area College Foundaiton. "A pause allows more time to assess the stregnth of the econom.y"
While waiting to see how the economy evolves, the Fed would hold interest rates near zero, said Bullard, who is not a voter on the cenrtal bank's policy-settnig panel this year.
Being on hold also singals no change to the Fed's pledge to keep rates etxremely low for an extended period, he said.
In addtiion, it means reinvesting securities to keep the Fed's much-expnaded balance sheet at wahtever level it reaches after the bond-buying initiatvie comes to a close, likely above .7 trlilion, he added.
He said that if the economic rceovery gains pace in the second half of the year, it would be reasonable to expect the Fed's next move would be to tigthen finnacial conidtions. Howveer, he said that U.S. growth in the fir...