St. Louis Fed President James Bullard It said on Friday that it expects the initial rate increase in the fourth quarter of 2022, but argued that the Fed should be in a position to act earlier if necessary, Reuters reported.
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“Inflation expectations are generally consistent with the Fed’s new flexible average inflation targeting framework.”
“It’s risky to wait too long to slow down, the Fed could fall behind the curve given the risk of inflation and continued job growth.”
“The risk is that the Fed would have to work very hard to raise rates if inflation breaks out and that tends to end in recession.”
“The preference would be to decide on the reduction plan at the Fed meeting in September, and start cutting after that.”
“There is still a lot of risk from the coronavirus, but Fed policy leans too much towards the moderate side.”
“Gradual reduction in larger increments each month rather than taking longer as long as purchases end in the first quarter of 2022 is indifferent.”
“We’re looking forward to the budding housing bubble, the Fed shouldn’t be fueling that with ongoing asset purchases.”
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