Fed's Bullard: We've got a ways to go to get restrictive on policy

Ross J Burland FXStreet

James "Jim" Bullard, president and CEO of the Federal Reserve Bank of St. Louis has said that rates need to go higher to bring inflation down.

Key comments

Estimates are all over the map on how many basis points qt is worth.

We've got a ways to go to get restrictive on policy.

On pace of hikes, I defer to chair Powell, doesn't matter that much in macro terms how quickly we get to right level.

Most important thing is we get to sufficiently restrictive level and that it is well understood by financial markets.
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All will go better if we get to restrictive level sooner to make 2023 a year of disinflation

Situation calls for much higher interest rates that what we've been used to.

Will have to keep rates at sufficiently high level all through 2023 and into 2024.

Labor markets continue to be extremely strong.

Feedback from labor market to inflation is not as strong as many people portray.

Tight labor market gives us license to pursue disinflationary strategy now.

Still think we'll have below trend growth in 2023.

Recession is not inevitable.

US Dollar update

The US Dollar is higher in the New York session with US stocks on the backfoot amid a global risk off start to the week. Major market averages opened trading on Monday lower as protests in China over COVID lockdowns brought some selling pressure to global equities. Early on the Dow dipped 0.4%, the S&P 500 slid 0.5%, and the Nasdaq lost 0.4%. DXY is up 0.18% to 106.25, but the downside is open while below 106.60:

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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