Bullard Says Fed May Need to Hike Rates Further If Inflation Quickens Pace
- Says Fed may need rates at 6%-6.5% if inflation rise resumes
- Former St. Louis Fed boss says FOMC left another hike on table
James Bullard
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Former Federal Reserve Bank of St. Louis President James Bullard said investors were too complacent on inflation and the central bank might have to increase interest rates as high as 6.5% if it starts to rise again.
“The risk that’s underpriced in markets is that disinflation stalls out or stops altogether and core PCE inflation starts to go up again,” he said Friday in Marrakech, Morocco, at a Euro50 seminar on the sidelines of the annual meetings of the International Monetary Fund and World Bank. “That would start a whole new round of consternation among policymakers about whether they’ve done enough.”