St. Louis Fed President James Bullard said in at a forum in Singapore that growth in US is on track to beat forecast for three consecutive years from 2017 to 2019. And he discussed a few consequences of the growth surprise. Firstly, it allowed Fed to normalize monetary policy along its projected path. Secondly, it helped profitability of U.S. firms, helping to drive U.S. equity markets higher. Thirdly, Dollar has naturally strengthened in 2018 (due in part to the larger growth surprise domestically).

Bullard added that “faster productivity growth” is needed to maintain the current real GDP growth rate. “A switch to the high state for labor productivity growth would raise the U.S. potential growth rate to a stunning 3.4 percent.” However, he noted “this switch is a possibility, but it has not materialized so far.”

Bullard’s presentation here.

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