Bullard Yaps About Too Little Inflation and the Need for Rate Cuts

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St Louis Fed President James Bullard is yapping mightily today about the need for rate cuts.

In a speech to the Union League of Chicago, James Bullard made Remarks on the Current Stance of U.S. Monetary Policy.

Bullard noted that the U.S. economy is expected to grow more slowly going forward, with some risk that the slowdown could be sharper than expected due to ongoing global trade regime uncertainty.

“In addition, both inflation and inflation expectations remain below target, and signals from the Treasury yield curve seem to suggest that the current policy rate setting is inappropriately high,” he said.

Bullard concluded: “A downward policy rate adjustment may be warranted soon to help re-center inflation and inflation expectations at target and also to provide some insurance in case of a sharper-than-expected slowdown.”

Group-Think Illiterates

These group-think economic illiterates do not understand inflation one bit.

They blow asset bubbles, which they do not count as inflation, then when the bond market signal asset prices are on the verge of collapse, they get concerned.

Inflation isn't too low, asset bubbles are too big.

The bond market message is simple: Don't blow asset bubbles unless you want another round of destructive asset deflation. For the third time since 2000, the Fed missed the message.

The Fed does not even see the current bubbles and won't until they break hard.

Mike "Mish" Shedlock

Comments (26)
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Helix6
Helix6

Please remind me why inflation is a good thing... I mean, a good thing for me and people like me...

Matt3
Matt3

I think we will end up with QE whatever and rates at zero or even negative. The Fed firmly believes (mistakenly) that this has worked since 2009. The acceptance of MMT is growing and we have no idea how badly this may end.

abend237-04
abend237-04

I'm a slow learner, but the Fed and it's FOMC have made a believer out of me since 2008. I see the likelihood of multiple rate cuts before year end at 100%.

The recession fat lady is warming up, but the plunge protection team is next door, once again, with gags and handcuffs.

Greggg
Greggg

Nothing will work better than a de-centralized -currency- money system.

thimk
thimk

We have tepid inflation because we are a major exporter of this product. YAY ! however anymore tariffs/supply chain disruptions from Tariffman and we will see some consumer goods price increases.

lol
lol

Rate cut?Rates are near zero lol,unless he's talkin NIRP,cuttin rates is a waste pf time,and with inflation soaring only option left for the fed is keep pretending and of course...……………..PRINT!

Six000mileyear
Six000mileyear

The FED is in for a real surprise when bond yields rise, but the economy slows.

Maximus_Minimus
Maximus_Minimus

Rates are already zero when figuring in the inflation, they are actually below neutral. Bullard must be a collage dropout.

Casual_Observer
Casual_Observer

The fed and Gov have major problems. If trump pulls off another 4 years we will live in a different world come 2024.