Bullard in the Q&A:
- The Fed is bound by tradition so unemployment rate will remain key metric but labor market conditions index is a better indicator
- A steeper yield curve would be welcome
- Influencing all grocery store prices with Whole Foods market share is unrealistic
- It would take time to build market share
- I'll withhold judgement on Amazon entering groceries
- Before the crisis, the Fed balance sheet was $800B, almost all cash
- Cash is now $1.5T; reserves, generously, would be at max $500B
- Normal balance sheet should be around $2T compared to $4.5T now
- It would take at least 5 years to get to a 'normal' balance sheet
- If Fed gets to 2.50% or 3.00%, you might see an inverted yield curve
- I don't see anything we need to be pre-emptive about, in regards to monetary policy
- I like the Washington focus on growth, 3% growth would solve a lot of problems
The yield curve comment is notable. He doesn't think it will happen because he expects the Fed to stop hiking.
