St. Louis Federal Reserve President James Bullard said on Friday that the United States remains in a position to see disinflation in 2023. They will see if the Fed may need to react more. He sounded optimistic, by saying the he expected the Fed to be dealing more with the strong economy in the coming months and not worrying as much about financial stresses.
Bullard sees an “80% chance” that financial stress will abate, and the discussion will shift back to inflation. According to him, the other outcome with a lower probability, is a recession. He cautioned that there could be downside risks if financial stress worsens.
The probability of a global crisis from recent stress is low, said Bullard. He mentioned that the Fed will continue to monitor the situation closely and will take appropriate action if necessary.
St. Louis Fed President argued that in response to the strong economy, the terminal rate for this year was raised by 25 basis points to a range of 5% to 5.75%, taking the assumption that financial stress subsides.
Regarding the interest rate path, Bullard said the projections suggest one more rate hike that could be at the next FOMC meting or soon after.
Fed's Bullard: Swift response to bank stress allows monetary policy to focus on inflation
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays below 1.0550 after mixed US data
EUR/USD stays under modest bearish pressure and trades below 1.0550 in the American session. Although the US Dollar struggles to gather strength following mixed macroeconomic data releases, the risk-averse market environment doesn't allow the pair to gain traction.
GBP/USD recovers modestly, trades near 1.2650
GBP/USD stabilizes near 1.2650 after falling toward 1.2600 earlier in the day. Nevertheless, the pair struggles to gather bullish momentum as the deepening Russia-Ukraine conflict causes investors to stay away from risk-sensitive assets.
Gold extends gains beyond $2,660 amid rising geopolitical risks
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.