US Fed could raise interest rates soon in March, says Bullard | Financial Markets News

President of the Federal Reserve Bank of St Louis James Bullard also said the United States Federal Reserve could reduce its spending.

Federal Reserve lawmakers could begin raising interest rates soon after March and reduce central bank spending as part of a response to rising inflation, President of the Federal Reserve Bank of St. Louis President James Bullard said.

“The FOMC may begin to increase the number of policy-makers early in the March meeting in order to control inflation,” Bullard, referring to the Federal Open Market Committee, said in a statement ready to hand over the CFA Society St. Louis Thursday. “The next increase in 2022 could be pulled or reversed depending on the rate of inflation.”

Bullard, who recently became one of the hawkish policy makers, approved a policy plan against inflation at a meeting last month. Fed policymakers believe a strong economy and rising inflation could lead to a slowdown in inflation “sooner or later” than previously expected, according to the minutes of the Dec. 14-15 released Wednesday.

In December, the FOMC announced that it would abolish the Fed’s monetary policy plan faster than we had previously stated at a previous meeting in early November, citing rising risks from inflation, at a rate that could buy in March. The meeting also included discussions on spending cuts without repatriating growing funds, although no decisions were made at the time they were made.

“Purchase of goods will end in the coming months, but the FOMC may also choose to allow the cash flow to reduce accommodation to a reasonable level,” Bullard said, referring to the “balance sheet”. possible alternatives ”of policy.

Bullard’s comments were more harsh than those of San Francisco Fed President Mary Daly, who on one occasion said he preferred the gradual expulsion but did not offer the idea of ​​reducing the page later. “That is a very different kind of dialogue than a reduction in procrastination; what would happen if we already started fixing Fed money, ”he said.

Bullard, who is voting on the monetary policy this year, said the committee is responding to “inflation”, with the highest value in decades, and much higher than policymakers expected last year.

“With real strong economies but rising inflation above what you want, the US economic policy has changed to accommodate rising inflation,” Bullard said.

Bullard offered an interesting overview of the US economy, saying it was looking at growth “at a higher level” when the economy responded with financial and financial support. He also said that he did not see any greater threat from omicron species, saying that the number of cases in South Africa had risen sharply and was declining and the US could follow suit.

Director of St. Louis Fed has at times been a supporter of the Fed, and was the first to make a decision stating that the purchase of bonds should be expedited and finalized by March to give government officials a higher interest rate than before. prepared.

-With the support of Olivia Rockeman.