Central Banks


Fed’s Bullard discusses economic outlook

Fed’s Bullard is due to speak at 1:20 PM ET on the economic outlook.

Bullard has been more hawkish generally. He last spoke on November 13. At that time he said

  • Sees room for US unemployment to improve substantially
  • Monetary and fiscal policy have been very effective
  • Execution of risk-based health policy critical
  • should get resources to households hit hard by virus
  • baseline is that further stimulus will be approved to help more targeted group of people
  • change in TIPS yields show market faith and Fed hitting inflation target
  • almost all of US GDP can be produced even with coronavirus circulating
  • low take-up of Fed facilities not a measure of success
  • Fed liquidity facilities are working as planned
  • Current pace of asset purchases has been effective, policy in a very good place.
  • Even if Fed emergency programs are shut down at the end of year, markets would know they can be reopened, trust Fed’s willingness to act as backstop
  • decentralized US response more flexible than national edicts, will be adequate to contain virus
  • investment will pick up substantially as vaccine nears, probability rises pandemic will end
  • Fed still “not thinking about thinking about” raising interest rates, still a long climb for economy
  • financial stability not a key concern in midst of pandemic
  • vaccine very good news, could and pandemic in 2021

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