St. Louis Fed Pres. James Bullard speaking on the economy says:
- Current US macro situation straining Fed's credibility on inflation
- Inflation expectations could become unmoored without credible Fed action
- Fed has taken important steps to return inflation to 2%, including rate hikes and promises of more
- Fed must follow through on forward guidance with rate hikes
- Effects of Fed to forward guidance on rates already taking hold on economy, inflation
- Labor markets grow best, expect continue GDP growth in 2022, risks remain substantial
Fed's Bullard is a voting member on the FOMC board in 2022. He is the most hawkish of the Fed officials currently. Last week he reiterated his view of rates going into a 3.5%.
Of note from the Fed is that the quantitative tightening begins today.
More from a Bullard:
- Not advisable to move to quickly and central banking
- Have already announced will raise rates by 50 basis points per meeting, that's a good path
- Want to get too higher policy rate expeditiously
- If unable to bring inflation under control, could be in for a very long haul
- Hopeful to bring inflation down to 2% very soon
- Have hope that special factors driving inflation will abate
- If pandemic had ended cleanly in 2021 Fed would have acted more quickly
