A Fed President Advices European Central Bank To Adapt US and Japanese Monetery Policies

The president of the Federal Reserve Bank of St. Louis departed from protocol by suggesting that the ECB should be more aggressive in its purchase of securities.  Europe is the largest economy in the world and its recession has been bad for the global economy.  It should be worried less about inflation, which is nowhere in sight, and make an effort to avoid deflation which is very difficult to reverse once it is established.  Central banks have excellent tools that work to reverse inflation.  The raise interest rates and economies slow down quickly.  With short term interest rates close to zero in Europe, traditional  monetary policy is ineffective.  Short term rates can't go much lower.  The US and Japan have adapted their monetary policies to life at the zero lower bound.  They are purchasing a variety of longer term securities to fight deflation and to stimulate growth.