October 15, 2019
St. Louis Fed President James Bullard said the U.S. economy is generally in good shape, but he emphasized that it faces some downside risk from trade uncertainty. “I’ve tried to encourage the [Federal Open Market] Committee to take action, which we have, to try to mitigate those risks and keep us on an even keel in the U.S.,” he said.
In an interview with Bloomberg TV, Bullard said that the FOMC moved a lot in the past year. He noted that he expects the effects of previous monetary policy moves to have an impact on U.S. economic data during the second half of 2019 and the first half of 2020. “The shift in monetary policy in the U.S. has been quite dramatic over the last year,” he said, pointing out that the impact has been as much as 125 to 135 basis points, not just the 50 basis points in cuts to the target range for the federal funds rate. “One part of what we need to do is take stock of where we are,” he said, “but I think also, we have to consider additional insurance in the meetings ahead.”
Bullard also discussed the yield curve, inflation and inflation expectations, and the FOMC’s dot plot in the interview.
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