CNBC’s “Power Lunch” came to St. Louis yesterday to interview James Bullard, president of the local Federal Reserve Bank. He’ll be a voting member of the Federal Open Market Committee next year, so reporter Steve Liesman wanted to know what the economy will look like by then. Here’s Bullard’s answer

I’m cautiously optimistic for the second half of this year. Hopefully we can get some growth and start on our path to recovery…. I think the third quarter, hopefully it will turn around. One of the things about when the economy is down is that you are vulnerable to further shocks that you don’t maybe anticipate. …. But barring that I think we’ll get some positive growth in the second half of the year.

Bullard also said the FOMC will “think very hard” this summer about how to unwind its accommodative policy moves once the economy is on solid ground. And he discussed proposals for a new financial regulatory structure. President Barack Obama is to announce details tomorrow, but one issue is how to account for vulnerabilities that endanger the whole financial system. Bullard says the Fed is up to that task:

The Fed was founded as the stability regulator for the eonomy. That was the original intention coming out of the panic of 1907. … The Fed naturally has played the systemic risk role but without any powers other than to track and to warn about systemic risk. … The key issue in systemic risk regulation is, what powers do you want to give the systemic risk regulator? The debate has to sharpen up and address that.