Bullard Discusses U.S. Monetary Policy with CNBC

November 10, 2021

St. Louis Fed President Jim Bullard discussed inflation, the tapering of the Fed’s asset purchases, and his projections for the policy rate in 2022 during an interview on CNBC’s Squawk Box Europe. The interview was recorded Nov. 9.

Asked about central banks’ responses to inflation, Bullard talked about the FOMC’s two-pronged strategy. One is based on the idea that some of the increase in inflation this year will moderate in 2022, and he said the FOMC is waiting for more data to see if that happens. On the other side, he said, the FOMC is preparing to be somewhat more aggressive with monetary policy to keep inflation under control if it does not moderate, noting the Committee’s decision to taper asset purchases at its last meeting at a pace that would finish up in the first half of next year.

He said that pace is sooner and faster than would have been anticipated six or eight months ago. “We’re positioning to be able to make a liftoff decision when it’s appropriate and when the data come in next year,” he said. (Liftoff refers to raising the policy rate from its near-zero level.)

During the interview, Bullard also noted that he is currently projecting two policy rate increases in 2022 based on information today.

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