The Fed – St. Louis Fed James Bullard

• October 27, 2022
• realestatelife
• Business & Markets, Interest Rates, Politics & Economy, Rates, Real Estate, Real Estate Finance, Recession, World News, Your Real Estate Life

More comments from St. Louis Fed James Bullard. He expects the central bank to end its “front-loading” of aggressive interest-rate hikes by early next year and shift to keeping policy sufficiently restrictive with small adjustments as inflation cools. “You do have to think about what the reasonable level is,” said Bullard, who has become Wall Street’s gauge for any Fed policy pivots. Such an approach would resonate with DoubleLine Capital Chief Investment Officer Jeffrey Gundlach’s view that Treasury yields may hit a peak between now and the end of the year. More Fed officials through the day today, Patrick Harker and Michelle Bowman among those making remarks. Beginning next week the Fed will go on its self-imposed lock down, no Fed officials will speak until after the FOMC meeting on Nov 2nd.

Following comments today from James Bullard, it is very likely at the FOMC meeting in two weeks the policy statement will be less aggressive. There is increasing momentum in the thought that the Fed after the Dec meeting will signal a slowdown in rate increases. The problem though is that if the Fed continues to drive for 2.0% inflation, the Fed can’t stop. The Fed, and other central banks must come to the understanding inflation won’t easily decline to meet that target. The Fed must face the reality it needs to change the inflation target from 2.0% to something around 4.00%. The central banks in the world are confused, missing inflation, trying to keep economies from diving deeper into inflation. In Europe inflation in places running at 10.0%. Taking the poison pill to break it when increasingly world consumers are now resigned to inflation won’t accomplish the intended result