Fed's Bullard: It seems like a good time for 'insurance rate cut'
Comments from Bullard:
- Inflation below target is surprising given fast growth
- A 50 basis point cut in July would be overdoing it
- Holding rate in June puts June probability really high
- Yield curve could go back to normal with lower rates
- Q2 and H2 US growth both look slower
These comments are not dovish. An 'insurance cut' is not the start of a cycle and if a dove like Bullard isn't interested in 50 bps, it's not going to happen.
He said it's a "good time" for a small rate cut. "I don't think we have to take urgent action. This is more in the realm of insurance," adding that a 50 basis point cut would be "overdone"