Fed's Bullard: Yield curve suggests FOMC should tread carefully
St. Louis Federal Reserve (Fed) President James Bullard is on the wires now, via Reuters, making a scheduled speech about the economic outlook and monetary policy at St. Cloud State University.
Bullard noted that the yield curve suggests that the FOMC should tread carefully.
Additional Comments:
Fed likely to miss its 2% inflation target for an eighth straight year in 2019.
Rate increases so far have “already been sufficiently pre-emptive over the last two years to contain upside inflation risk.”
The Fed’s preferred measure of inflation has averaged about 1.6 percent since 2012, roughly what some inflation-protected securities indicate is the expected level in the years ahead.
“These correlations have broken down during the last two decades, so they no longer provide a reliable signal.”
Do not feel interest rates should rise above the current range of between 2.25 and 2.5 percent.
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
