Former "hawk king" of the Federal Reserve, Bullard: Latest CPI reignites hopes for rate cut in September, but the pace will still be slow
Former St. Louis Fed President James Bullard said that despite the latest U.S. inflation data fueling hopes of a rate cut in September, he expects the Fed's monetary easing pace to be slow. Speaking at a virtual event hosted by UBS Group in Singapore on Friday, Bullard said that due to the lack of urgency in the U.S. real economy, the pace of rate cuts will be slow. However, he added that the latest U.S. inflation report has once again brought the September rate cut back into play. While Fed officials' projections indicate only one rate cut in 2024, the market is pricing in 50 basis points of cuts in November and December this year. Recently, as inflation moves closer to the Fed's target and the U.S. economy remains resilient, Bullard has revised his view from three rate cuts envisioned in April to two. Bullard, currently the Dean of the Krannert School of Management at Purdue University, stated that the outlook for U.S. economic growth remains strong, but he ruled out the possibility of a rate hike later this year. Bullard said, "If the Fed wants a hawkish policy, it can keep rates unchanged and delay easing." He expects the yield on the U.S. 10-year Treasury to remain around 4% by 2025
According to the Zhitong Finance and Economics APP, former St. Louis Fed President James Bullard stated that despite the latest US inflation data fueling hopes of a rate cut in September, he expects the pace of Fed monetary easing to be slow.
Speaking at a virtual event hosted by UBS Group in Singapore on Friday, Bullard said that due to the lack of urgency in the US real economy, the rate cut will be gradual. However, he added that the latest US inflation report has once again brought the September rate cut back into play.
Although Fed officials' projections indicate only one rate cut in 2024, the market is pricing in a 50 basis point cut in November and December this year. Recently, as inflation moves towards the Fed's target and the US economy remains resilient, Bullard has revised his view from three rate cuts envisioned in April to two.
Bullard, who is currently the Dean of the Krannert School of Management at Purdue University, stated that the outlook for US economic growth remains strong, but he ruled out the possibility of a rate hike later this year.
Bullard said, "If the Fed wants a hawkish policy, it can keep rates unchanged and delay easing." He expects the yield on the US 10-year Treasury note to remain around 4% by 2025