By Adan Allington, St. Louis Public Radio
St. Louis, MO – The head of the St. Louis Federal Reserve Bank official says he's concerned about "political meddling" as financial reform legislation makes its way through Congress.
Speaking at Washington University Fed President Jim Bullard said that he's concerned about a Senate provision establishing audits of monetary policy, which he says could hamper the Fed's independence.
The central banker also singled out a proposal making the president of the New York Fed a presidential appointee a move he claims is blatant political meddling.
"Because it would give the New York Fed some kind of independent status away from the board of governors and that's not the way the Fed works," said Bullard. "So I think that's another example of Congress trying to muscle its way into monetary policy."
Bullard cautioned that an erosion of the Fed's independence could result in a period of 1970's-style volatility which would harm financial markets around the world.
He also cautioned that while Greece is only a minor player in the European Economy that country's sovereign debt crisis could spread to other countries such as Portugal, Spain and Italy.
"We're very cognizant of that, so that's why we're keeping a very close eye on the situation," notes Bullard. "Even though, Greece is a long way away, its only 2-percent of European GDP and at least at some broad level it shouldn't have a big impact on the U.S. but we're still being very careful about it."
Bullard is optimistic about a continued economic recovery stateside, highlighting positive GDP growth for three consecutive quarters.