Hawkish Bullard Cays Core PCE Is Quite High

Fed Governor speaking on BBGTV said US Core PCE Is “Quite High” and added that the Fed should take towards a more hawkish policy in the next couple of meetings. He said 3%-4% Rate `Is Not My Base Case’

Fed Governor Bullard

Feds Bullard Speech Highlights

  • Core PCE is quite high
  • Fed should take towards a more hawkish policy in the next couple of meetings
  • Markets are past the taper tantrum.
  • The Fed could move further faster
  • Fed taper increased to $30 billion per month would open the door to rate increase end of Q1 2022
  • Tacking hawkish Lead now could be an advantage by smoothing out the normalization process in doing less later
  • Does not see neutral rates rising beyond pre-pandemic levels
  • Even if inflation comes back down the Fed is in a good place for next year.
  • Can keep rates lower
  • Bullard has two hikes priced in for next year.
  • Agrees with the market assessment
  • Fed could move on rates before the taper concludes and could also allow for the runoff of the balance sheet after the taper 

Source: Bloomberg

From The TradersCommunity US News Desk