Bullard Speaks with CNN International about U.S. Economy, Inflation
April 1, 2021
St. Louis Fed President James Bullard discussed the U.S. economic outlook, the increase in the 10-year Treasury yield in recent months, and the prospect of higher inflation. He spoke during an interview on CNN International.
Data on the pandemic in the U.S. suggest that it is coming to a close, although risks remain, he said. He also noted that data suggest that the U.S. economy is poised to boom in the year ahead. In addition, he thinks labor markets will improve dramatically from where they are now. However, he added that we have to get the pandemic under better control than it is today, but we are moving in the right direction.
On the 10-year Treasury yield, he said that the run-up in recent months has been in reaction to better forecasts for the U.S. economy and higher inflation expectations.
Regarding inflation, he said that the Federal Open Market Committee (FOMC) is committed to its 2% inflation target, but has missed the target on the low side on average since 2012. The Fed’s new monetary policy framework suggests that the FOMC will be looking for inflation to run moderately above target for a time to make up for the past misses and to hit 2% on average over time, he said.
(For more information, see Bullard’s March 31 article, “Is Inflation on the Horizon for the U.S. Economy?”)
