WASHINGTON DC, UNITED STATES — THE European debt crisis isn’t likely to throw the global economy back into a recession, a Federal Reserve official said Tuesday.

The turmoil “will probably fall short of becoming a worldwide recessionary shock,” said James Bullard, president of the Federal Reserve Bank of St Louis, in a speech delivered in London.

In the past when countries defaulted on their debt, the episodes generated financial turmoil, but they didn’t throw the world economy into a downturn, Bullard said. He cited Russia’s default in 1998 as a case in point.

The global economy shrank by 0.6 per cent in 2009, its first dip since World War II. The global economy is growing now, and the United States is in recovery too.

Europe’s problems are occurring as the global financial system is fragile. Wall Street and stock markets around the world have been rattled by the problems. Even so, Bullard doesn’t think the European crisis will spread into a broader financial contagion, such as the 2008 reaction after the collapse of Lehman Brothers. “I do not think this is a likely scenario,” he said.

Bullard is a voting member this year on the Fed’s main policymaking group, called the Federal Open Market Committee. The panel, led by Fed Chairman Ben Bernanke, oversees interest rate decisions and other policy matters.

To foster the economic recovery in the United States, the Fed has pledged to hold rates at record lows near zero.

A massive rescue effort launched earlier this month by European countries and the International Monetary Fund buys countries substantial time to get their fiscal houses in order, Bullard said.

In the United States, the crisis is providing one boon, Bullard said. Investors flocking to safety have been snapping up US Treasuries. That’s driven down the rate on 10 year Treasurys, which are used to peg long-term mortgage rates. Rates on 30-year mortgages fell to 4.84 per cent last week, the lowest this year.