St. Louis Fed President James Bullard said in a presentation that the US economy is “poised to surpass the previous peak” in the current quarter. The US is “moving into the expansion phase of the business cycle”.
“Market-based inflation expectations have recovered from the lows reached during March 2020,” he added, likely encouraged by Fed’s new policy framework.
“TIPS-based breakeven inflation, based on CPI inflation measures, could move higher and still be consistent with a PCE inflation outcome modestly above the 2% target,” he said. “This would be a welcome development for the FOMC, as inflation has generally been below target for many years.”
