Now that the Fed has begun buying Treasuries with proceeds from maturing CMBS, one regional Fed chief thinks a series of smaller policy actions that appropriately weigh economic risks can become one single larger action. Speaking at a conference in Arkansas Thursday, James Bullard, president of the Federal Reserve Bank of St. Louis, said the American economic outlook has been lowered but remains positive and any policy changes undertaken by the FOMC toward quantitative easing”should be disciplined and focused.” “Large, sudden purchases rarely are optimal. ‘Shock and awe’ is almost never a good way to proceed,” Bullard said. “Policy actions should be commensurate with the risks that the economy faces.” Bullard said core inflation is low but manageable and he wants to keep it from failing to levels observed in Japan in the ’90s. Still, the Fed may have to purchase more Treasuries than necessary to maintain its balance sheet at $2.05trn should the disinflation risk increase. Write to Jason Philyaw.