Fed's Bullard: Yield curve suggests FOMC should tread carefully
|St. Louis Federal Reserve (Fed) President James Bullard is on the wires now, via Reuters, making a scheduled speech about the economic outlook and monetary policy at St. Cloud State University.
Bullard noted that the yield curve suggests that the FOMC should tread carefully.
Additional Comments:
Fed likely to miss its 2% inflation target for an eighth straight year in 2019.
Rate increases so far have “already been sufficiently pre-emptive over the last two years to contain upside inflation risk.”
The Fed’s preferred measure of inflation has averaged about 1.6 percent since 2012, roughly what some inflation-protected securities indicate is the expected level in the years ahead.
“These correlations have broken down during the last two decades, so they no longer provide a reliable signal.”
Do not feel interest rates should rise above the current range of between 2.25 and 2.5 percent.
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