St. Louis Fed President James Bullard has endorsed a strategy to “front-load” a large rate hike. He also reiterated his opinion that it would be desirable to set the policy interest rate at 3.75% to 4% at the end of the year in order to curb the highest inflation in regarding 40 years.
“There is still a long way to go before monetary policy reaches a level of restraint,” he said in an interview with CNBC. “Given the rise in inflation indicators this spring, my view is that[the policy rate]should be between 3.75% and 4% by the end of the year. “I’ve been in favor of front-loading rate hikes, which I think will give us more credibility in the fight once morest inflation.”
President Bullard
Source: Bloomberg
Several Fed presidents, including Bullard, emphasized this week that inflation has not yet slowed, dodging speculation that the Fed is turning less aggressive in a tightening phase.
“For our policy to feel good enough, we need to see compelling evidence that all inflation indicators, both headline and core, are moving down in a compelling way,” Bullard said in an interview. said.
He then added that policy rates would likely need to be kept “at a higher level for a longer period of time” to see a broader slowdown in the pace of inflation.
The U.S. economy is not currently in a recession, he said. “Given the job growth in the first half of the year, it’s hard to say we’re in a recession,” he said.
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Original title:Bullard Urges Front-Loading Rate Hikes to Boost Fed Credibility(excerpt)