Fed's Bullard: Seeing initial rate increase in Q4 of 2022


St. Louis Fed President James Bullard said on Friday that he expects the initial rate increase in the fourth quarter of 2022 but argued that the Fed should be in a position to move sooner if needed, as reported by Reuters.

Additional takeaways

"Inflation expectations generally consistent with Fed's new flexible average inflation targeting framework."

"Risky to wait too long to taper, Fed could be left behind curve given inflation risk, ongoing job growth."

"Risk is Fed would have to really scramble in raising rates if inflation breaks out and that tends to end in recession."

"Preference would be to decide on taper plan at September Fed meeting, start tapering after that."

"Plenty of risk still from coronavirus but Fed policy is tilted too much to the dovish side."

"Indifferent on tapering in larger increments each month versus taking more time, as long as purchases end Q1 2022."

"Nervous over incipient housing bubble, Fed should not feed into that with ongoing asset purchases."

Market reaction

The US Dollar Index continues to edge higher in the American session and was last seen gaining 0.3% on the day at 92.15.

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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD tumbles below 1.17 as Fed sets clear taper timeline

EUR/USD has reversed course, plunging under 1.17 after the Fed signaled tapering of bond buys as soon as November, and the conclusion of the process in mid-2022. The hawkish surprise means a rate hike could come sooner. 

EUR/USD News

GBP/USD pares gains on Fed's hawkish shift

GBP/USD is trading under 1.3650, falling as the Fed signaled tapering could begin shortly and end in mid-2022. The prospects of US rate hike are boosting the dollar across the board. 

GBP/USD News

Gold: Fed's hawkish tone marred by risk-on sentiment

Fed leaves interest rates unchanged says moderation in asset purchases "may soon be warranted". Gold volatile on the FOMC statement and rallies into daily resistance. Risk-on tone persists surrounding Evergrande contagion prospects abating. 

Gold News

XRP price bound for another dip before 40% rebound

Ripple price came down 20% since the beginning of this week. With some upside today, bulls stand to face a bull trap that could get quite painful. A better entry point at $0.78 looks to be more promising for bulls.

Read more

Powell Quick Analysis: Three hawkish points propel dollar, NFP critical to cement tapering

Powell surprised by signaling taper announcement could come in November. Tapering may end by mid-2022, opening the door to earlier rate hikes. Powell's comment on employment goal "all but met" is a significant hawkish shift. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures