" interview. "I think the global safe real rate in the short term is about zero."
If the real rate measured against inflation is zero and inflation runs around 2%, then that also should put the Fed's benchmark at 2%, he said. The federal funds rate currently is targeted in a range between 2.25% and 2.5%. "I would like to take this opportunity to recenter inflation expectations at 2%. I think that would pay handsome dividends for the Fed going forward," Bullard said. "We've made some big moves in monetary policy over the last three or four months. I think it's time to wait and see how that's going to impact the economy going forward."
Indeed, the Fed made a policy pivot in January when it said it would be "patient" about implementing changes to monetary policy going forward. The central bank advanced that position in March when it changed its rate forecast from two anticipated hikes this year to none.to change course and cut rates. He said earlier this week that he would like to see a full percentage point reduction.
"We get advice from all kinds of people, including you and including other politicians," Bullard told Liesman. "We get a lot of input from a lot of different angles."
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