Speaking on CNBC
- Fed has a new framework and said we would tolerate inflation, but this is above target
- Some risks to inflation to the upside
- skeptical inflation will moderate in 2022
- He looks to get taper going and finished by the end of the first quarter next year
- if inflation doesn't moderate, will have to the more aggressive to get inflation down
- the good news is we have vaccines in the vaccine take-up is picking up
- the economy is learning to adapt to the pandemic
- Sees about 2 1/2 million people who have retired: does not expect those people to and retire
- house prices are pricing low income people out of this market
- I think asset purchases were very appropriate at the beginning of the pandemic, but it is time to taper asset purchases off
- Fed needs to have some optionality come next spring
- the problem is if we reach the spring and taper is not done and inflation has not moderated, what you do then?
- If we get taper done sooner, we have some optionality in 2022
- expects GDP 6% in 2021 and 4% in 2022
- We have a booming economy that probably doesn't need more stimulus at this point
- Concerned that wages aren't rising as fast as inflation especially at the low end of the income distribution
- It is incumbent on the Fed to do the best we can at the low end of the income distribution
- We monitor state of the markets, but I think it is a good reason we dont need asset purchases at this point with the asset prices near record levels.
- I dont think we are in trouble today regarding housing but we could get there in another year if we continue
- We should allow the run-off of the balance sheet as we get to the end of the taper.
Bullard is staying with his story. Start the taper. Get it down by the end of the Q1. Give the Fed some optionality. He is most concerned about the housing market. He lamented about past mistakes in the last housing market tumble and does not want to repeat it.