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Speech
Bullard Talks about Policy Rate and “Soft Landing” Prospects with Wall Street Journal
St. Louis Fed President Jim Bullard discussed his expectations for the policy rate and inflation and the prospects for a “soft landing” for the U.S. economy in a live interview with The Wall Street Journal.Bullard said that his policy rate projection included in the FOMC’s December Summary of Economic Projections, or SEP, was for a target range of 5.25% to 5.5% at the end of 2023, which is slightly higher than the median projection. He cautioned that it’s not certain where the economy or inflation will be then.“The underlying judgment on my part is that inflation will probably ...
Output Gaps, the Taylor Rule and the Stance of Monetary Policy
The Taylor rule offers a formula to calculate a prescribed policy rate. How do alternative measures of the output gap affect this prescribed rate?
Newsletter
Teaching the Linkage Between Banks and the Fed: R.I.P. Money Multiplier
The money multiplier has been a standard concept in introductory economics classes for decades, but changes in the way the Fed implements monetary policy has made the model obsolete. This issue provides information about the linkages between the Fed and the banking system and provides teaching suggestions.
Journal Article
Is Monetary Policy Sufficiently Restrictive?
St. Louis Fed President Jim Bullard examines whether the policy rate could be considered sufficiently restrictive to return inflation to 2% over time.
Speech
Bullard Discusses Inflation and His Views on the Policy Rate with Yahoo Finance
St. Louis Fed President Jim Bullard shared his views on the latest inflation data and Fed action needed to put downward pressure on inflation. During an interview with Yahoo Finance, he also said that the probability of a U.S. recession is not particularly elevated at this time.Asked about the latest CPI report, Bullard said, “my takeaway is that inflation is broader and more persistent than many have thought and that the Fed will have to act in order to keep inflation under control.” He added that the Federal Open Market Committee (FOMC) has a plan in place—a 50-basis-point increase in ...
Discussion Paper
How Do Survey- and Market-Based Expectations of the Policy Rate Differ?
Over the past year, market pricing on interest rate derivatives linked to the federal funds rate has suggested a significantly lower expected path of the policy rate than responses to the New York Fed’s Survey of Primary Dealers (SPD) and Survey of Market Participants (SMP). However, this gap narrowed considerably from December 2015 to January 2016, before widening slightly at longer horizons in March. This post argues that the narrowing between December and January was mostly the result of survey respondents placing greater weight on lower rate outcomes, while the subsequent widening ...
Speech
Bullard Discusses Policy Rate Increases and His Views of U.S. Recession Predictions
St. Louis Fed President Jim Bullard talked about his preferences for raising the policy rate and his views of recession predictions in remarks during a European Economics and Financial Centre virtual discussion.Bullard said the U.S. economy continues to do very well and that the country has created about 2.7 million jobs in the first six months of the year, “an outstanding number even for a full year.”Although financial markets have been predicting a U.S. recession next year, Bullard said he is “a little skeptical that we’ll get to a recession.” The U.S. economy is slowing, but ...
Speech
Is the Fed “Behind the Curve”? Two Interpretations
During a presentation at Princeton University, St. Louis Fed President Jim Bullard presented two interpretations of whether the Federal Reserve is “behind the curve” on raising its policy rate relative to high inflation.
Gauging the Fed’s Current Tightening Actions: A Historical Perspective
In 2022, the Fed started its current tightening cycle. How does it compare with other cycles in the past 40 years in terms of the magnitude of policy rate hikes?
Speech
Bullard Discusses Policy Rate Increases and U.S. Inflation
St. Louis Fed President Jim Bullard discussed the pace of increases in the Fed’s policy rate and the impact on inflation. He made the comments during a virtual discussion at an HSBC Global Emerging Markets Forum.Bullard said the U.S. inflation rate was way above the Federal Open Market Committee’s 2% target, which is why the FOMC has moved aggressively to raise its policy rate. He also pointed to forecasts made by FOMC members in September’s Summary of Economic Projections that suggest additional moves in the policy rate this year.“We’re hopeful that by acting sooner and with ...