August 23, 2019
St. Louis Fed President James Bullard shared his views on U.S. monetary policy and insuring the U.S. economy against a global slowdown. He also discussed the inverted yield curve and low inflation expectations during an interview with Bloomberg TV.
In discussing monetary policy, he cited examples from the 1990s—in particular, 1995 and 1998—as an analogy for the situation today. For instance, he noted that the Fed lowered the policy rate in 1998 given concerns about the Asian currency crisis. The U.S. economy powered through that episode, and the Fed took those insurance rate cuts away later, he added.
“I think that’s a great baseline idea about what we’re looking at now with a global trade war, global manufacturing in contraction and possible spillovers to the U.S.,” Bullard said. “You want to insure the economy against that and stay out of trouble.”
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