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An official with the U.S. central row warned Thursday it should be ready to invigorate a program from the financial pass if the earth’session biggest plan appears headed for deflation.

James Bullard, president of the Federal Reserve Bank of St. Louis and a voting member on the Federal Reserve’s main policy-setting committee, made the case in comments to reporters and in a paper.

He said the Fed should subsist ready to resume buying government debt on the bond markets granting that the nation seems headed toward a twist with deflation.

A shopper checks a jerkin from a sales heighten with a final drawback price of 1,900 yen ($22) at a clothing store in Tokyo. Deflation has kept its seize forcibly on the world’session second biggest economy on account of almost a year and a half. .(Itsuo Inouye/Associated)

Bullard said the weak economy poses the jeopardize that the United States could tip into a Japanese-like bout of deflation, where economic growth stagnates.

That’s a widespread and prolonged send down in prices of wares, values of homes and stocks, and in allowance. At its choke, for the period of the Great Depression, deflation led to falling profits and business investment, plant closures and layoffs and trade protectionism.

Still, Bullard said that the deflation danger is low.

The idea behind buying powers that be debt is that it would bring into subjection the circulating medium supply, trial up prices, energize the economy and nip deflationary forces. Last year, the Federal Reserve bought up to $300 billion US worth of Treasury securities.