St. Louis Fed President James Bullard told CNBC today, “we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation. This is a lot of inflation.”
“Our credibility is on the line here and we do have to react to the data,” he added. “However, I do think we can do it in a way that’s organized and not disruptive to markets.” Bullard added that Fed should raise interest rate by a full percent point by July. “I think my position is a good one, and I’ll try to convince my colleagues that it’s a good one,” he said.
Regarding the 7.5% consumer inflation rate in January, Bullard said, “my interpretation was not so much that report alone, but the last four reports taken in tandem have indicated that inflation is broadening and possibly accelerating in the U.S. economy,”
“The inflation that we’re seeing is very bad for low- and moderate-income households,” he said. “People are unhappy, consumer confidence is declining. This is not a good situation. We have to reassure people that we’re going to defend our inflation target and we’re going to get back to 2%.”
