Slowing Inflation would Pressure Fed to Slow Tapering – Bullard

In an interview with Bloomberg Radio’s Kathleen Hayes and Vonnie Quinn today, St. Louis Fed President said Inflation is about to head higher, expects unemployment falling to about 6% late in 2014 and asset price bubbles may become a “big concern” – but not like in pre-crisis housing.

Bullard also said on “The Hayes Advantage”:

– First QE Programs aimed at spurring growth
– Fed doesn’t vote on monetary policy this year
– He supported March 19th statement by FOMC
– Numerical thresholds worked ‘very well’
– Fed ‘closer to normal monetary policy’
– ‘Inflation has surprised me to the low side’
– Inflation has stabilized at a lower level
– Inflation should speed up toward 2% Fed Target
– Global headwinds may have restrained inflation
– Expects first rate rise in 1st quarter of next year
– Unemployment fell faster than Fed expected
– Fed has better systems today for ‘flagging’ bubbles’
– QE tapering has ‘Gone quite well’ for FOMC; ‘Smooth process’
– ‘Markers very sensitive’ to pace of QE buying
– FOMC would be reluctant to alter QE Taper pace
– Sees a good year in 2014 for U.S. Economy; Bullish on 2014
– ‘Growth inhibitors’ are dissipating in U.S.
– Expects 3% economic growth for this year.
– Predicts Fed funds rate in 2016 at 4% or 4.25%
– Says inflation ‘poised to head back up’
– ‘Important to defend inflation from ‘low side’
– Inflation expectations are stable
– ‘Critical for Fed to have inflation target
– Expects continued growth in China
– Slowing inflation would pressure fed to slow tapering

To listen to “The Hays Advantage” Podcast with St. Louis Fed President James Bullard: here.

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