“Getting into the Zone” (Presented in Louisville, Ky.)
November 17, 2022
St. Louis Fed President Jim Bullard presented “Getting into the Zone” at an event hosted by Greater Louisville Inc.
Bullard said inflation remains unacceptably high, well in excess of the Federal Open Market Committee’s target of 2%. During 2022, the FOMC has been moving toward policy settings that will put meaningful downward pressure on inflation to return it to the target, he said.
Bullard addressed the question of what is a “sufficiently restrictive” policy rate for the current macroeconomic environment. His approach is based on generous assumptions that tend to favor a more dovish policy. Still, the policy rate isn’t yet in a zone that may be considered sufficiently restrictive, he said.
Note: For an updated version of the figure on Slide 26 that has corrected data for the first six months of 2019, see Bullard’s June 2023 Regional Economist article, “Is Monetary Policy Sufficiently Restrictive?”