bullard-wrong

Fed's Bullard on Bloomberg TV:

  • Rate hikes have had an impact especially in the housing market
  • Have to react if inflation doesn't fall as expected
  • Wont predate what remove he backs at December FOMC meeting
  • In 2023, if inflation starts to decline meaningfully, Fed can stay where it is at higher rate level
  • First have to get to the right rate level and then moved to data dependency
  • Does not appear to be a lot of financial stress now in US economy
  • Sees possibility of good inflation dynamics in 2023
  • Not clear that equity pricing should be main metric of financial liquidity
  • US still in low productivity growth regime
  • He thinks US GDP will be revised higher for 1st half of the year at some point but too late to be useful for monetary policy
  • Fed should not react to declines in the stock market
  • Inflation expectations are looking good now at least based on TIPS market
  • Thinks we have the right expectations and markets, and Fed has right policy in place