Fed's Bullard speaking in virtual discussion on economy
As the clock ticks toward the quiet period before the next FOMC decision on November 5, Fed's Bullard is getting in some last words. In a virtual discussion on the economy, the nonvoting member says:
- Fed est. will keep rates low for quite a while
- Fed isn't battling markets over the rate outlook
- Fed policy in great shape for right now
- Negative rates not viewed as good option in the US
- We have made substantial progress in getting virus under control
- US daily fatalities per million have fallen to levels similar to accidental injury
- So far so good as far as Fed policy
- Fed is buying bonds at a healthy clip
- His base cases the is for no 2nd wave of virus in terms of daily rate of fatalities
- Sees rapid US 3rd quarter growth continuing into fourth-quarter and 1st half of 2021
- Most businesses can operate safely, and succeed economically
- Could wait until 1st quarter 2021 to assess need for further fiscal stimulus
- If inflation goes higher, Fed will need to react as aggressively as in past
- Credit risks aren't materializing so far, expects economy to continue to grow
- End of the tunnel for the pandemic could lead to a boom
- There are still 4.5 million people that are temporarily laid off
- Housing has been a bright spot
- Pandemic made speed up retirement decisions
- Some may work longer, since they can't work from home, others may retire sooner
- for now and medium-term US debt burden is manageable
Bullard has been more on the bullish side for the recovery vs the consensus (Hawkish). His comments are congruent with that view.
