FED Official Bullard Speaks: Will Interest Rate Increases Continue? Hinted at!

st. Louis Fed Chairman James Bullard has called for additional rate hikes to ensure inflation returns to the central bank’s 2% target over time.

FED Official Bullard Points To Increase In Interest Rates

In his speech for his presentation at the Greater Jackson Chamber, Bullard said, “Continued increases in policy interest rates can help set a disinflationary trend throughout 2023 by keeping inflation expectations low, despite continued growth and strong labor markets.”

Fed officials largely adhered to their view that interest rates should rise above 5% to contain persistent inflation.

A report on Thursday showed US producer prices rose more-than-expected in January, following consumer price data that didn’t slow as much as predicted earlier this week.

Bullard said that the continuation of interest rate hikes as well as the low level of inflation expectations “may make 2023 a disinflationary year”. Bullard continued his speech as follows:

“Market-based measures of inflation expectations are currently relatively low, in part as a result of forward-looking Fed policy in 2022.”

Bullard also said he expects economic growth to remain moderate this year and the unemployment rate to return to a more normal long-term level.

With strong retail sales and better-than-feared manufacturing data on Wednesday, investors are raising their predictions for further action by the Fed.

US central bank steps cryptocurrency followed closely by investors.

*Not investment advice.