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Bullard Discusses Cryptocurrency, Oil Prices, Inflation on CNBC

May 14, 2018

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St. Louis Fed President James Bullard shared his views on cryptocurrency, higher oil prices, U.S. inflation and other topics during an interview on CNBC. The interview took place in New York following his presentation, “Non-Uniform Currencies and Exchange Rate Chaos,” at the CoinDesk Consensus 2018 conference.

Bullard noted that there has been a lot of new issuance of cryptocurrencies and that cryptocurrency is facilitating trade that would not otherwise occur. However, he said that “when you have a lot of different currencies trading around, the exchange rate problem is a big deal because you don’t know how they’re going to trade against each other.” He added that this happens even with currencies like the Japanese yen and the U.S. dollar.

Regarding the potential impact of higher oil prices, Bullard said that oil prices have a more neutral effect on the U.S. economy now than in past years. He explained that a big oil price shock would hurt the U.S. economy on the consumer side but help on the production side, suggesting that “it more or less washes out at this point.”

On inflation, he cited the Dallas Fed’s trimmed-mean inflation rate, which is currently 1.8 percent. “That doesn’t sound very high to me, and it hasn’t changed much in the last year,” he said, adding, “it’s possible that will tick up a little bit but that would just get it closer to our target.”