Fed: We have a ways to go to be tight on policy — James Bullard

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James “Jim” Bullard, president and CEO of the Federal Reserve Bank of St. Louis, has declared that rates must rise to reduce inflation.

Key comments

Estimates vary widely as to the basis points the qt is worth.

We have a way to go to be restrictive with politics.

As for the pace of the hikes, I refer to Chairman Powell, it doesn’t matter much macroeconomically how quickly we get to the right level.

The most important thing is that we reach a sufficiently restrictive level and that the financial markets understand this well.
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Everything will be better if we reach the restrictive level sooner so that 2023 is a year of disinflation

The situation calls for much higher interest rates than we were used to.

Rates will need to be maintained at a sufficiently high level throughout 2023 and into 2024.

Labor markets remain extremely strong.

The impact of the labor market on inflation is not as strong as many believe.

The rigidity of the labor market allows us to follow a disinflationary strategy.

We continue to believe that we will have below-trend growth in 2023.

The recession is not inevitable.

US dollar update

The dollar rose in the New York session, with US stocks retreating, in the midst of a risk-free start to the week worldwide. Market averages opened lower on Monday as protests in China over COVID lockdowns caused some selling pressure in global stocks. Earlier in the day, the Dow was down 0.4%, the S&P 500 was down 0.5% and the Nasdaq was down 0.4%. The DXY is up 0.18% to 106.25, but the downtrend is open as long as it is below 106.60:

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Source: Fx Street

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