The WSJ spoke with Bullard in an interview:
- “The bottom line is then you should take the signal from the unemployment rate decline as a signal of an improving labor market and an improving economy”
- “The economy is much closer than normal than what we’re used to thinking about over the last five years”
- Further declines in inflation would put pressure on Fed to take some sort of policy action
- My gut instinct is that weather has been an important factor during this period.”
I cringe whenever a central banker talks about his ‘gut instinct’. The important takeaway is that even if inflation ticks lower, the Fed will use forward guidance rather than pausing the taper.