July 1, 2021
St. Louis Fed President James Bullard shared his views on the state of the U.S. economy, upside risks to inflation, the discussion on tapering the Fed’s bond purchases, and the booming housing market during an appearance on Fox Business.
Bullard noted that expectations for real GDP growth and for inflation are higher now than they were six months ago, and that labor markets have improved faster than would have been projected. “The U.S. economy is really roaring forward here coming out of this pandemic, and we’re getting bottlenecks and inflation concerns,” he said, “and I think we’re going to have to be attentive to those concerns.”
Asked about the Fed’s $120 billion a month of bond purchases, which include mortgage-backed securities, Bullard said, “I do think we need to get moving” on the taper discussion. “We have a booming housing market. It’s not at all clear that we want to be feeding into an incipient housing bubble,” he said.
Bullard also discussed the potential for productivity to shift to a higher growth rate, the oil market as a barometer of global demand, and continuing general price pressure well into 2022.
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