St Louis Fed's Bullard is (Sort Of) Back on My Good Side
Looks like the arsonist has changed his tune.
The Federal Reserve Bank may not be able to wait until uncertainty over several potential global crises recedes before beginning to tighten its ultra-loose monetary policy, a top Fed official said on Wednesday.
Even after the Fed begins withdrawing monetary stimulus, there will still be plenty of accommodation in place, St. Louis Fed President James Bullard said in slides accompanying a speech for delivery in London. Since December 2008, the Fed has kept interest rates near zero and has bought more than $2 trillion in assets to help push borrowing costs down still further.
Here's what I see: when they have a vote, they're all about the easy money. As soon as they're sitting in the cheering section, they start railing on cheap money.
Anyone else remember Bullard's Seven Faces of “The Peril” from last year?
In this manuscript, Federal Reserve Bank of St. Louis President James Bullard argues that the Federal Open Market Committee’s extended period language may be increasing the probability of a Japanese-style deflationary outcome for the U.S. within the next several years. Bullard concludes that an appropriate quantitative easing policy offers the best hope for avoiding a low nominal interest rate, deflationary outcome.
The economy is no different now than it was when he wrote that, it's just easier to pimp the popular option when one doesn't have to answer to the rest of the Committee.