January 5, 2018
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During an interview with Bloomberg, St. Louis Fed President James Bullard shared his views on the GDP growth outlook, below-target inflation, the Phillips curve and the possibility of yield curve inversion.
Regarding the new tax bill, he said that if the tax cut drives productivity and business investment higher, the trend growth rate for the U.S. economy would increase. While that would be a good outcome if it happens, he said, “I feel like, for now, we can be wait-and-see as far as monetary policymakers on that.”
On inflation, he noted that there really hasn’t been progress in the last two years toward the Fed’s 2 percent target, even with the low unemployment rate. “I don’t really think we’re getting the kinds of Phillips curve effects that people so emphasize,” he said. “I think we’ve got to modify our story about the Phillips curve. It’s either nonexistent or whatever it is, the power there is very, very small compared to what it has been historically.”