Federal Reserve Bank of St. Louis President James Bullard said Monday the easy-money policies that have defined central bank actions over recent years have been….

“I think unconventional U.S. monetary policy has been sufficiently aggressive to replicate the outcomes that would have been achieved in more traditional times and is an effective tools to stimulate growth.”   

Fair enough, but this begs the question. Since the FED already used their BAZOOKA of unconventional warfare against the recession and the financial collapse (2008-today), what are they going to do the next time it happens? While most economists would argue that 2008-09 was once in a lifetime, that is simply not true. Particularly, given today’s economic setup. Due to the same “unconventional” tactics, the economic setup we have today is not that different from the 2007. Basically, it is an extension of it at much higher leverage level.

So, what will happen when Unconventional and Conventional no longer work? I think we are about to find out. One thing is for sure, it looks scary.  

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What Happens When “Unconventional”FED Becomes Conventional. Clue…It’s Scary  Google

WSJ Writes: Fed’s Bullard: Unconventional Fed Actions ‘Sufficiently Aggressive’

Federal Reserve Bank of St. Louis President James Bullard said Monday the easy-money policies that have defined central bank actions over recent years have been effective tools to stimulate growth.

The official said that even though the Fed cut rates effectively to zero percent at the end of 2008 and has provided stimulus via unconventional bond buying programs and guidance about the outlook for short-term rates since that time, these tools appear to replicate the influence its traditional regime of manipulating short-term interest rates once delivered.

“I think unconventional U.S. monetary policy has been sufficiently aggressive” to replicate the outcomes that would have been achieved in more traditional times, Mr. Bullard said.

That said, the current tool kit of unconventional policies has some challenges. “It is difficult for policy to respond to declines in inflation” when short-term rates can be cut no further, Mr. Bullard said. Bond buying and future rate increase guidance “may or may not substitute effectively” for traditional changes in short-term interest rates, he said.

Mr. Bullard made his comments in presentation materials that largely mirrored a recent speech he gave in Hong Kong. He repeated Monday his belief that while the issue remains up for debate, he sees little value in increase international coordination between central bank leaders when it comes to making monetary policy.

Mr. Bullard’s presentation was prepared for delivery before an event at the USC Marshall School of Business in Los Angeles. The official, who doesn’t currently hold a voting role on the monetary policy setting Federal Open Market Committee, didn’t make forward looking comments on U.S. monetary policy or the economy.