The Fed’s most hawkish voter, St. Louis Fed President James Bullard, reiterated on Thursday (17th) that he supports a 4-yard rate hike by July 1, calling on the Fed to immediately Take action to prevent inflation from spiraling out of control.
U.S. inflation has risen to its highest level since 1982 and shows no sign of falling, Bullard said on Thursday that he still supports a 4-yard rate hike by July 1 and the start of a balance sheet shrinkage in the second quarter as the U.S. faces inflation Risks that won’t dissipate, 2022 will be the second year in a row of high inflation, which is why the Fed should act sooner and more aggressively.
Bullard reiterates that Fed should begin reducing its 9 trillion in second quarterDollarIf inflation remains high, selling some long-dated bonds is also an option.
Bullard on Thursday dismissed concerns that higher interest rates could cause a recession.
He emphasized that the initiation of interest rate hikes is not actually a “tightening” of monetary policy, but an “exit from ultra-loose” monetary policy, and the upcoming policy change should not be seen as a move to constrain the market and the economy. He judged that strictly speaking, the risk of economic recession is not great, and it is expected that the bond market should be able to respond smoothly.
Bullard, who had earlier backed the Fed to be open to considering an ad hoc meeting, downplayed Thursday, saying that an ad hoc meeting is not imminent.
On the same day, Cleveland Fed Bank President Loretta Mester, a hawkish Fed voter, said she supports a cycle of rate hikes starting in March to curb worsening inflation, the strength of which depends on the economy. Data and foresight.
According to CME’s FedWatch tool, federal funds futures investors’ forecasts for a 2-yard rate hike next month have dropped to around 32 percent from nearly 100 percent last week, and a 1-yard chance of a rate hike has risen to more than 67 percent.