Bullard speaking to Bloomberg
- Slowing China growth not a surprise
- US fundamentals and outlook still look good
- Says last 10 days shouldn't change the Fed's outlook
- It will be a good day when we make the first move (rates)
- To be clear we're making a miniscule move
- We need to be gradual and data dependant
- Generally speaking falling oil is good for the US economy
- We need to look through the effects of oil
- For example PCE is holding up
- Thinks US is ok on the inflation front
- Unemployment is going to come down to the 4% level and that's going to push up inflation
- Says by the end of 2016 US will be above 2% inflation
- Wages are a lagging indicator and can't be used to predict inflation
- H1 growth looks pretty good and looks like H2 will be better than that
- Lower CPI expectations give me pause
- Finds the TIPS decline a bit concerning
- Tools for raising Fed rates should be effective
- Probably won't put any cap on reverse repos at the time of liftoff
Given his past record on inflation I'd take his CPI comments with a large bag of salt. His dismissal of wage gains and their lagging effect on inflation is dangerous as it may mean that the US overshoots on CPI before they know what is happening. But as is the nature of inflation, most central bank moves to contain it are reactive not proactive
James Bullard speaking outside Jackson Hole
