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"A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further," he said. "Such outcomes tend to be associated with extended periods of lower, not higher, interest rates, as well as poor returns on other assets. Moreover, renewed economic weakness would pose its own risks to financial stability."
His comments built upon St. Louis Federal Bank President James Bullard's remarks Tuesday that quantitative easing remains the best monetary policy option right now.
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