Fed Bullard: We have to get inflation under control. We have a good plan to do so

Prices as Bullard begins his interview:

• S&P index -83.5 points or -2.14% at 3817.01
• NASDAQ NASDAQ The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass The Nasdaq Stock Market or NASDAQ is an American stock exchange. It trails only the New York Stock Exchange (NYSE) in market capitalization and is part of a network of stock markets and options exchanges.Launched back in 1971, NASDAQ is the acronym for the National Association of Securities Dealers Automated Quotations. Since then it is known simply as NASDAQ and has become one of the most influential exchanges worldwide.The NASDAQ was the world’s first electronic stock market, and has since ass Read this Term index -329 points or -2.88% at 11060
• 2 year yield, 2.562%
• 10 year yield, 2.783%

Comments:

• I agree that 50 basis points is a good plan for now
• market repricing is partly due to Fed, partly due to prices before the downturn
• Wants to get the rate to 3.5% by the end of the year
• The faster you get rates higher and get inflation expectations under control, the more room we have to lower rates
• Can see lowering rates in 2023 or 2024 if we get inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term under control
• I don't see stagflation as a scenario. Don't see 1970s style market with recession and higher inflation.
• It seems we have a very good economy
• The economy should slow down but it should still be above trend during 2022.
• I don't see anything stopping unemployment going below 3% this year
• We will need higher interest rates to keep inflation under control
• See growth faster in the 2nd half of the year.
• Sees US growth of 2.5% or 3% this year above potential rate of 1.75% to 2.0%.
• We have a 2nd reopening going on with people getting used to getting out of the pandemic. People are getting out and about and that will lead to strong consumption this year
• Don't see a recession this year
• Don't see a recession next year, not my base case
• Recessions come because of some really bid shock. There can be some, but I don't see a really big shock.
• We want to see all the measures of inflation moving in the same direction. Unfortunately that is to the upside now.
• Inflation is very tough on low and medium income households and on renters
• Some businesses are going to get punched in the face as consumers substitute basic necessities for luxuries
• I think this disinflationary pressures will come through the product cycle as companies become afraid of raising prices.
• Corporations think of better ways to increase productivity and lower costs
• Quantitative tightening is an important part of our policy
• We have that teed up to start June 1
• It is not just the US that is pursuing this policy. It is all central banks around the world
• All things equal, QT should put pressure to the upside on rates. Him him

Summary: Bullard stayed away from the idea of raising more than 50 basis points, Although he stuck to the 3.5% end of year Fed funds target. He also sees growth remaining strong at 2.5% – 3% this year with unemployment perhaps moving below 3% by the end of the year. As a result, he does not see a recession and even said that he does not see a recession next year as his best case. Him him

Values at the end of the interview show:

• S&P index -90.38 points or -2.32% at 3810.40
• NASDAQ index -352.25 points or -3.09% at 11036.25
• 2 year yield 2.558%
• 10 year yield 2.71%