Receding uncertainty bullish for U.S. growth: Fed's Bullard

St. Louis Fed President James Bullard, a voting member of the U.S. central bank's policy-setting committee in 2013, said implementation of the country's new healthcare law could also create headwinds, but other restraints have been lifted.

"This year seems to be characterized by less macroeconomic uncertainty compared to previous years," Bullard said in prepared remarks to an agribusiness conference hosted by Arkansas State University. "This bodes well for U.S. macroeconomic prospects in 2013."

However, the U.S. economy could be hit by steep automatic spending cuts on March 1 unless the country's lawmakers agree to other measures to reduce its long-term deficit, which economists and politicians warn would undermine the recovery.

Bullard voted with his colleagues to maintain Fed bond purchases at an $85 billion monthly pace at the central bank's meeting on January 29-30. The central bank argued that its aggressive action was needed to support a gradual recovery and lower unemployment, which hit a lofty 7.9 percent in January.

Bullard said calmer conditions in Europe, where a bold promise of action by the European Central Bank had worked better than "might have been expected," was a key reason for the better global growth outlook and should aid growth elsewhere.

"Global macroeconomic uncertainty has been relatively high in the past three years," he said. "By contrast, 2013 has dawned with a reduction in global macroeconomic uncertainty that may persist for some time."

Bullard is one of the more optimistic of the Fed's 19 members of its policy-making committee, who has previously forecast that U.S. growth would pick up to 3.5 percent this year. In its advance estimate, the government reported the economy shrank at a 0.1 percent annual pace in the final three months of 2012 after growing at a 3.1 percent rate in the previous quarter.

(Reporting By Alister Bull; Editing by Andrea Ricci)