Policy rate would need to reach at least bottom end 5-7 percent range: St. Louis Fed President Bullard

29 Nov 2022 , 03:46 PM

At an event held yesterday, St. Louis Fed President Jim Bullard talked about the level of the policy rate needed to put sufficient downward pressure on inflation. Bullard stated that the policy rate would need to reach at least the bottom end of a 5% to 7% range to be sufficiently restrictive, given the data the Federal Open Market Committee has today. I also think that were going to have to continue to pursue our interest rate increases into 2023, and theres some risk that well have to go even higher than the lower end of that range as we go through 2023 if the inflation data in particular does not cooperate with us,? Bullard said. Rates may have to stay in the restrictive range throughout 2023 and into 2024, he added. Inflation in the US remains unacceptably high, well in excess of the Federal Open Market Committees (FOMCs) target of 2%. During 2022, the US FOMC has been moving toward policy settings that will put meaningful downward pressure on inflation to return it to the target. This approach has included significant increases in the policy rate as well as a program of balance sheet reduction by US Fed. Powered by Capital Market – Live News