Federal Reserve Bank of St. Louis President James Bullard said bringing down inflation may require the central bank to overshoot a neutral target interest rate, which he sees as about 2%. “If you wanted to put downward pressure on inflation, you’d actually have to get to neutral — go beyond neutral,” Bullard said at an event by hosted by Columbia University and SGH Macro Advisers in New York on Thursday. “And I think that’s a major concern of mine — we’re not really in a position to do that right now, but we have to get in a position to do that” in case inflation doesn’t moderate as expected, he said. Bullard repeated his view that Fed should raise interest rate by 100 basis points by July 1 and start balance-sheet run-off in the second quarter, in response to the fastest inflation in 40 years.
Source: The Bond Buyer
