Bullard Speaks with Fox Business about Economic Growth, Jobs and Interest Rates

November 8, 2021

St. Louis Fed President James Bullard talked about economic growth, the labor market, the tapering of the Fed’s asset purchases and his interest rate expectations during a Fox Business interview.

Bullard noted that the GDP growth rate slowed down in the third quarter, but he expects growth will return in the fourth quarter and through 2022 and will be higher than 4% for all of 2022. “I think we’re looking at a very rapidly expanding economy,” he said.

He noted that with an unemployment rate of 4.6%, businesses continue to scramble for employees in “one of the hottest labor markets that we’ve seen in the U.S. in the post-war era.” Bullard discussed the retirements that occurred during the pandemic and said he doesn’t expect to see a lot of improvement in labor force participation.

Regarding interest rates, Bullard said he is projecting two policy rate hikes in 2022. “By conventional wisdom, we’d have to complete the taper before we’d start with the normalization of the policy rate,” he said.

If the tapering of the Fed’s asset purchases continues at the pace announced last week, then the process would be completed in mid-2022. Bullard noted that he thinks the Fed could end the taper somewhat sooner if needed, and he reasserted that he has advocated finishing by the end of the first quarter of 2022. “Depending on how the data come in, if inflation’s more persistent than we’re saying right now, then I think we may have to take a little sooner action in order to keep inflation under control,” he said.

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