St. Louis Fed President James Bullard said the US is “in a much stronger position with respect to reopening we would have anticipated and inflation has come along with it.” He warned that “we have to be ready for the idea that there is upside risk to inflation and for it to go higher.”
Regarding tapering, Bullard said “the playbook from the aftermath of the global financial crisis may not be the same one we use in the aftermath of the pandemic.”
“I don’t think we are in the quiescent, low volatility period we were in the aftermath of the global financial crisis. Instead we are in a high volatility many things happening at once situation and because of that we have to be able to react,” he added.
Dallas Fed President Robert Kaplan said “when we got to March it was clearer that we were going to get the pandemic under control”. And, “by the time we get to June…you’ve really got a big upgrade” on economic outlook. A majority of Fed officials expected rate hikes in 2023. That’s “monetary policymakers simply reacting to the dramatically improved economic outlook.”
