Bullard Speaks with Fox Business about Inflation, U.S. Economy Growth

May 20, 2022

St. Louis Fed President Jim Bullard talked about the importance of raising rates to control inflation and discussed his expectations for U.S. economic growth. He spoke during an interview with Fox Business from the St. Louis Fed’s Economy Museum.

Bullard reiterated that 50-basis-point increases in the Fed’s policy rate are a good plan for now, and he noted that he also has said that the Fed should try to get to 3.5% by the end of the year, which is higher than what some of his colleagues have called for.

“The more we can front-load, and the more we can get inflation and inflation expectations under control, the better off we’ll be,” Bullard said. “Then, in out years, ’23 and ’24, we could be lowering the policy rate.”

Bullard said he believes that the U.S. economy will grow more slowly this year than last year, which was a “banner year,” but that growth still will be at an above-trend rate of 2.5% to 3%. A “second reopening,” with people getting used to the endemic phase of the COVID-19 pandemic, will lead to strong consumption, he said.

Bullard also spoke about reducing the Fed’s balance sheet, the strong labor market and the effect of fiscal spending during the pandemic.

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