The president of the Federal Reserve Bank of St. Louis, James Bullard, He said on Friday that the United States is still in a position to see disinflation in 2023. They will see if the Fed has to react more. Bullard was optimistic, saying he expects the Fed to focus more on the strength of the economy in the coming months and not worry as much about financial stress.
Bullard sees an “80% chance” that financial tensions will ease, and the debate will refocus on inflation. According to him, the other outcome, with a lower probability, is a recession. He warned that there could be downside risks if financial stress worsens.
The likelihood of a global crisis resulting from the recent tensions is low, Bullard said. He mentioned that the Fed will continue to closely monitor the situation and will take appropriate action if necessary.
The President of the St. Louis Fed argued that, in response to the strength of the economy, the terminal rate for this year was raised by 25 basis points to a range between 5% and 5.75%, based on the hypothesis that the financial tensions subside.
As for the interest rate path, Bullard said projections suggest one more rate hike could be at or shortly after the next FOMC meeting.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
