March 23, 2021
St. Louis Fed President James Bullard shared his views on the policy responses to the pandemic, the U.S. economic outlook, debt-to-GDP ratios and currency competition. He spoke during a moderated panel discussion at the National Association for Business Economics (NABE) Economic Policy Conference.
Bullard noted that the monetary policy and fiscal policy responses during the COVID-19 crisis have been quite good. He also noted that the economic recovery has been quite a bit stronger than most people had projected as of last March and April.
He said that he is expecting a strong year on many dimensions for the U.S. economy. For 2021, he has penciled in 6.5% real GDP growth, inflation moving up to 2.5% and unemployment moving down to 4.5%. He cautioned that the pandemic is still going on, adding that he’d like to see actual data come in that verifies his forecast.
On the issue of federal debt, Bullard noted that he has been thinking about new ways to assess debt-to-GDP ratios across nations and how much debt is too much. He said the advice from macroeconomists has to take the country into account, rather than having a blanket statement that some debt-to-GDP ratio is appropriate for all nations at all times.
Regarding the U.S. dollar, he reiterated his view that the dollar is going to be the world’s reserve currency for a long time. He also discussed currency competition, privately issued currencies and exchange rate chaos. (See Bullard’s July 2018 presentation “Non-Uniform Currencies and Exchange Rate Chaos.”)
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