Fed's Bullard: Will watch to see if tax cuts drive up US productivity
Fed member James Bullard speaking on Bloomberg TV
- There is some possibility that tax reforms could drive up investments
- Sees growth in the "low 2% range" in 2018
- Not seeing inflation despite job gains
- Inflation expectations are low but have moved up a little bit
- With low inflation, Fed can afford to wait and see
- Yield curve is flattening as Fed raises rates (no kidding, mate)
- Not made any progress on inflation in the last 2 years
- Fed should debate now what a flattening yield curve means, not later in the year when it's even flatter
- Doesn't see a possibility of a recession now, but have to watch out 2018 plays out with regards of the slope of the yield curve
- A change in Fed chair would be a good time to re-examine Fed's communication
- 2% inflation target is important, doesn't want to mess with the target - but maybe put a process in place to review inflation target
That's about it from Bullard. Plenty of topics covered in that short interview, but once again be reminded Bullard is not a voting member in this year's FOMC - so of course he has plenty to say about inflation not moving, then again he is a dove.
Anyway, his final point on reviewing the inflation target should take more merit - just blindly and constantly sticking to 2% may not be the best way for central banks to move forward in the future. It just offers a lack of flexibility - not to mention it acts like a sort of self-fulfilling prophecy.
Dollar still unchanged across the board as markets await the release of the NFP data in an hour.