St. Louis Fed President James Bullard said today that the “current level of the policy rate is about right”. And, he added that “maintaining the current level of the policy rate would be an appropriate policy” for the near future.
He explained that a “modernized” version of the Taylor rule recommends a “relatively subdued policy rate path” closer to St. Louis Fed’s recommendation. On the other hand, the “unmodernized” Taylor rule calls for “rapid increase in the policy rate”. Though, he also acknowledged that Fed’s September medium projection is “between the modernized and unmodernized” versions.
Press release and Bullard’s presentation.
