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Fed hawk Bullard calls for lower growth — but at least no recession

St. Louis Federal Reserve President James Bullard said Thursday that available data does not suggest the U.S. economy will fall into recession, but he repeated his expectations for lower growth ahead.

At a speech in London, the central bank hawk reiterated comments he made earlier this month, saying the U.S. is in a new economic "regime." His long-term projection for the U.S. economy is uncertain, but not "pessimistic," he said.

"I do not think of the current regime as pessimistic. Output grows at the trend pace of 2 percent, but the unemployment rate remains quite low, and inflation remains at 2 percent. In addition ... growth could improve if productivity growth improves," Bullard said.

James Bullard
David Orrell | CNBC
James Bullard

The remarks reflect a similar sentiment to comments he made on June 17. In those remarks, Bullard forecast 2 percent gross domestic product growth and an unemployment rate of 4.7 percent through 2018.

He also said a federal funds rate of just 63 basis points will likely stay in place. The Fed's current target rate is 25 to 50 basis points.

Bullard's comments in London followed the United Kingdom's vote last week to leave the European Union. The U.K. referendum results briefly sent global stock markets into a tailspin before a recovery in recent sessions.

Market expectations for Federal Reserve interest rate hikes also fell after the vote.