Fed's Bullard
Bulllard....I am so ready to tighten I can't wait
  • I pay a lot of attention to market-based measures of inflation expectations such as TIPS and swaps
  • There's a risk management emphasis, which means we need to stay higher for longer
  • We will push inflation to 2% in a reasonable compact time frame
  • It's a totally bad idea to mess around with inflation target

The price action tody is ugly as the Nasdaq decline approaches 3%. The idea of keeping rates higher for longer and not responding is a big reason why stocks are in a bear market and there's no sign of any kind of shift here.

More:

  • Real rates into positive territory is an encouraging sign
  • Fed is going to have to be careful on not over-interpreting a decline in inflation as it moves back to 2%
  • We will probably need 'higher for longer' on rates than markets anticipated previously

On the last point, I think it's clear that he's not talking about current pricing. Right now the terminal top is priced at 4.53% and falling to 4.20% at year-end 2023.