Fed's Bullard: We pay attention to markets and data

Author: Adam Button | Category: Central Banks

Comments from Bullard on Fox Business:

  • The world is in the middle of a global slowdown, we're assessing what it means for the US
  • Will wait and see on 2s10s inversion, would need to be a sustained inversion
  • US consumer looks pretty good
  • TIPS implied inflation too low
  • Wants to hit Fed inflation target and would not mind if inflation moves higher than 2%
  • Fed doesn't need to take inter-meeting action
  • Some of the market moves might be overdone given US data
  • Data looks good but monetary policy must be forward looking
  • Stock market is still up this year and a re-pricing might have been expected
  • Fundamentally the labor market is good and growth is reasonable
He doesn't get too deep into monetary policy here. Previously, however, he was a bit more explicit that he didn't think it was time for another cut. He's omitted that (at least so far).

Here were Bullard's comments from Aug 6:

  • Fed has already 'done quite a bit' for economy
  • Rates are "in the right neighbourhood" but will watch how economy reacts
  • Will watch how economy reacts to trade war before deciding on next move
  • Said he had 'penciled in' another rate cut for this year
He hasn't hit any of those notes.

Now with more:
  • Fundamentals of the US economy are pretty good
  • We can get through this if we play our cards right
  • Data looks good but policy must be forward looking

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