Fed's Bullard discusses economic outlook in a virtual discussion
- Fed programs had clear announcement effect on markets
- Fed's dollars swamplands also helped to calm markets
- Goal to stop health crisis morph into financial crisis
- Can continue economic shut down for too long
- Prolonged shutdown respect see, depression
- Shut down his blanket policy, need risk-based approach
- Negative rates are not a good option for the US
- Everyone understands rates on hold for quite a while; not worried about normalizing Fed policy a moment
- Fed's balance sheet at $10 trillion sounds high (current balance sheet is $6.5 trillion but moving that way)
- market interest rates expected to stay low with or without use of strategies like yield curve control
Fed's Bullard has been an advocate of restoring the economy before the economic impact becomes too dire. In that respect the sides more with Pres. Trump.
He also has gotten in line with other Fed officials regarding negative rates. Last week, the Fed funds futures contract creeped up to November 2020 where the yield dipped into negative territory. Currently the nearest negative rate expectations is April 2021
