Economics
There's a New Bullard Rule That Finds No Need to Raise Rates
- St. Louis Fed president proposes a replacement to Taylor Rule
- Low inflation expectations suggest little need for high rates
James Bullard
Photographer: Akio Kon/Bloomberg
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Federal Reserve Bank of St. Louis President James Bullard is proposing a new monetary policy rule -- effectively the Bullard rule -- that updates popular policy guidelines such as the Taylor Rule and concludes there’s no reason to raise interest rates further.
Bullard’s benchmark adjusted the Taylor rule for developments in the past two decades, such as the weak link between the unemployment rate and inflation, the aging of the U.S. population and low inflation expectations.