St Louis Fed President James Bullard speaks about monetary policy in Nashville

  • There is particular reason to doubt that inflation is returning to Fed target
    GDP growth around 2% unlikely to change any time soon
  • Sees little evident that further declines in unemployment will do much to boost inflation
  • Global growth upgrade insufficient for big US impact

"Recent inflation data call into question the idea that U.S. inflation is reliably returning toward target'"

"Many future developments could impact this policy path, but the Fed does not need to preempt any of them."

"The FOMC can wait and see how key macroeconomic developments play out in the quarters ahead."

Bullard is the jester of global central bankers but he's right on every point here and I expect the FOMC will come around to his line of thinking. At the moment, the Fed funds market is pricing in a 43% chance of a Fed hike in December or earlier.

Here's the press release and here's a copy of the presentation.