“The First Steps Toward Disinflation in the U.S.” (Presented in Little Rock, Ark.)
July 7, 2022
Inflation in the U.S. is comparable to 1970s levels, and U.S. inflation expectations could become unmoored without credible Fed action, St. Louis Fed President Jim Bullard said during a presentation to the Little Rock Regional Chamber. He noted that the Fed has reacted by taking important first steps to return inflation to the 2% target and that U.S. market interest rates have increased substantially, partially in response to promised Fed action.
Bullard’s presentation was an update to versions given on June 1 at the Economic Club of Memphis and on June 20 in Barcelona. In the July 7 presentation, he incorporated more recent data. He also added comments about the current statistical discrepancy between U.S. gross domestic product (GDP) and U.S. gross domestic income (GDI), which are providing conflicting views of recent economic conditions. He noted that the GDI measure appears to be more consistent with observed labor markets, suggesting the economy continues to grow.
The presentation took place during a two-day visit to Little Rock, Ark., as part of the St. Louis Fed’s ongoing transparency and outreach efforts across its seven-state Federal Reserve District. Bullard meets regularly with business and civic groups in the four zones that make up the District (including the Little Rock Zone) to deepen his understanding of local economic conditions.