Comments by St Louis Fed president, James Bullard, in Tokyo
- US policy possibly at neutral, so Fed should be cautious
- Inflation expectations are still a bit low
- It is a question of how far the Fed should go while ECB, BOJ remains on hold
- Slower pace of rate hikes could re-center expectations
- Aggressive pace of rate hikes could invert yield curve
Bullard is a well-known dove and he isn't a voter on the board this year. His comments aren't too surprising but it is part and parcel of what feeds into the discussion in the Fed meetings.
Either way, it continues to highlight a couple of things that the Fed still needs to look at and that is if they still want to tighten so aggressively when the rest of the world is facing a stall - and global developments continue to stutter - as well as questions on the yield curve.
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