The Fed's Bullard in an interview with Nikkei yesterday after the higher than expected CPI data, said:
- High CPI ratifies the Fed strategy of moving expeditiously to neutral beyond neutral as we move through the year
- I think we have mapped out a strategy that will contain inflation and was back toward 2% but we have to move quickly
- I think 75 basis point is a lot of virtue to it
- if we raise by 75 basis point we will get us to the neutral rate
- I think it is a good idea to get to 3.5% this year
- A lot of my 3.5% projection has been priced into the market already
- I suppose it is possible that the Fed rate could reach 4% by the end of the year
- my expectations is that inflation will be declining in 2023
- we may not have to do much or anything in 2023
- I do think that we are going to start a disinflationary process soon partly because of supply factors are going to fade, and because the Fed has switch policies rather abruptly here and start a downward pressure on inflation
- I don't think the payroll numbers are consistent with any kind of interpretation that the US is in a recession
- I have never seen a recession where we created 2.7 million jobs in a six-month period
For the full interview click here
/inflation
/Fed
