Market news
21.06.2021, 14:35

St. Louis Fed President Bullard: We're in much stronger position with respect to reopening and inflation has come along with it

  • Says he sees 2022 core PCE inflation at 2.5%
  • We need to be ready for upside risks to inflation
  • We need to be ready to react on both side of that and stay nimble
  • The anecdotal evidence is overwhelming that this is very tight labor market
  • We're going to give plenty of leeway for the labor market to improve
  • There doesn't seem to be much doubt about inflation being above target in 2021; question is how quickly will that dissipate
  • The debate is where does the monetary policy have to be to get the gentle glide back to 2% inflation
  • Part of the debate is the question of what it means to have inflation above 2% for some time
  • The low-rate and low inflation era is not ending any time soon
  • On hike in reverse repos, this was largely a technical move to keep rates within our band
  • The tapering debate is open
  • This is not an environment where tapering could be put on automatic pilot
  • Fed will need to be ready to make adjustments to tapering

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