Fed’s Bullard continues push for interest rate hike
St. Louis Fed
Jim Bullard, president and chief executive officer of the Federal Reserve Bank of St. Louis
Jim Bullard[5], president of the Federal Reserve Bank of St. Louis[6], again insisted it's time to raise the short-term interest rate, which has been near zero fore almost six years.
In a speech to the St. Louis Regional Chamber Friday, Bullard said inflation, which has remained below the Federal Open Market Committee's 2 percent target, is no longer a reason to keep the interest rate so low. "Global factors, including low inflation in Europe and lower oil prices, may be temporarily holding inflation down in the U.S.," he said, and inflation is projected to rise toward the 2 percent target.
"Labor markets have shown steady improvement this year," he said. "Lower longer-term interest rates and lower oil prices in recent months should provide additional tailwinds for U.S. macroeconomic performance."
Bullard noted, too, that the unemployment rate has fallen faster than the Fed expected. "The actual unemployment rate today is 5.8 percent, about a full percentage point ahead of schedule."
How about recent market volatility? He said from summer into October, markets began to price in the possibility of a global recession, largely on news of a weaker-than-expected European economy. "My own view has been that such fears were overstated, in part because U.S. macroeconomic fundamentals seem strong."
Last month, too, Bullard said that the Fed's bond-buying stimulus worked better than expected[7] and that it's time to raise interest rates.
You can see Bullard's written presentation here[8].
Banking, Financial Services
References
- ^ Greg Edwards (feeds.bizjournals.com)
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- ^ Twitter (twitter.com)
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- ^ Jim Bullard (feeds.bizjournals.com)
- ^ Federal Reserve Bank of St. Louis (www.bizjournals.com)
- ^ stimulus worked better than expected (www.bizjournals.com)
- ^ here (www.stlouisfed.org)