Bulllard....I am so ready to tighten I can't wait
- I pay a lot of attention to market-based measures of inflation expectations such as TIPS and swaps
- There's a risk management emphasis, which means we need to stay higher for longer
- We will push inflation to 2% in a reasonable compact time frame
- It's a totally bad idea to mess around with inflation target
The price action tody is ugly as the Nasdaq decline approaches 3%. The idea of keeping rates higher for longer and not responding is a big reason why stocks are in a bear market and there's no sign of any kind of shift here.
More:
- Real rates into positive territory is an encouraging sign
- Fed is going to have to be careful on not over-interpreting a decline in inflation as it moves back to 2%
- We will probably need 'higher for longer' on rates than markets anticipated previously
On the last point, I think it's clear that he's not talking about current pricing. Right now the terminal top is priced at 4.53% and falling to 4.20% at year-end 2023.