Fed's Bullard: Inflation could rise to 2% as soon as next year

Eren Sengezer FXStreet

The Fed new policy framework has a good chance of success to help lift inflation in years ahead, St. Louis Federal Reserve President James Bullard said on Thursday and argued that inflation could rise to 2% as soon as next year.

Additional takeaways (via Reuters)

"Not reasonable to make a second wave virus scenario dominate economic forecasts at this point."

"Fatality rates from the virus are unlikely to reach March and April levels."

"Baseline case should be that adaptation to virus among companies allows better economic growth."

"Premature to think of when to taper asset purchases."

"Fed can afford to wait and see how the economy evolves before making further decisions about quantitative easing."

"Even if optimistic forecast develops, Fed policy would not change given the deep hole left to fill in the economy and desire to get inflation higher."

Market reaction

The US Dollar Index edged lower in the last hour and is currently losing 0.15% on the day at 94.20.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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