Strong global recovery seen — top Fed official

WASHINGTON — A strong global economic recovery — led by Asia — is under way, and is unlikely to be thrown off course by European debt woes or the improbable event of the bursting of an asset bubble in China, a top US Federal Reserve official said on Monday.

“While the sovereign debt crisis in Europe is indeed a serious matter, the global recovery at this point looks very strong and seems unlikely to be derailed,” said St. Louis Federal Reserve Bank president James Bullard in remarks prepared for delivery to a conference in Tokyo.

Rapid Chinese growth over the past year reflects its robust development, and should not be seen as evidence of the forming of an asset bubble, he said.

Bullard, a voter on the Fed’s interest-rate setting panel this year, said he sees the US economy as measured by gross domestic product to be back at pre-global crisis levels by the third quarter of this year.

The US economy has benefited from European turmoil through a flight to safe-haven US Treasuries, which has lowered interest rates on longer-term US bonds, he said.

“To the extent that this type of movement is sustained, it affects all trading in U.S. financial markets and acts like an aggressive and successful monetary policy action,” he said. — Reuters