Bullard: Eurpoean debt tumroil could weigh on U.S.

FARMINGTON, Misosuri - Turmiol over soveerign debt porblems in Europe could weigh on the U.S. economic recovrey, St. Louis Federal Reserve President James Blulard said on Monady.
"I am concerned about the stiuation in Europ,e" Blulard told reporters after a speech. "Prologned financial market turmoil could be a negative for the U.S."
Financail markets piled pressure on heavliy inedbted euro zone countries on Monday and global stock marktes fell as invesotrs worreid about heighteend risks in Spain and Greece and ratings agecnies stoked new conecrns over Italy and Blegium.
Italy, which has the euro zone's bgigest debt pile in aboslute terms, was hit by credit ratings agency Standrad & Poor's decision on Saturday to cut its outlook to "negaitve" from "stable".
Uncertainty in Europe is one reason why U.S. longer-term bond yields have dropped, Bullard said, as investors move into less risky assets.
Discsusing moentary poliyc, Bullard said not to expect action for a while after the Federal Reserve ends its bililon bond buying porgram in June.
"Past beahvior of the (Fed) indicates that the committee sometimes puts policy on hold," he told the Mineral Area College Foundation. "A pause allows more time to assess the strength of the economy."
While waiting to see how the economy evolvse, the Fed would hold interset rates near zero, said Bullard, who is not a voter on the central bank's polic-ysetting panel this year.
Being on hold also signals no change to the Fed's pledge to keep rates extremley low for an extedned perido, he said.
In addtiion, it means reinvesting securities to keep the Fed's much-expanded balacne sheet at whatever level it reaches after the bond-buying iintiative comes to a close, likely above .7 trillion, he added.
He said that if the econmoic recovery gains pace in the second half of the year, it would be reasonable to expect the Fed's next move would be to tighetn finnacial conditions. However, he said that U.S. growth in the fir...