St. Louis Fed President James Bullard said yesterday that inflation has “come in hotter” than he expected during Q2. Thus, “I think we’re going to have to go a little bit higher than what I said before.” He added that the federal funds rate will have to go to 3.75-4.00% by the end of the year, comparing to the current 2.25-2.50%.
“Since modern central banks have more credibility than their counterparts in the 1970s, it appears that both the Fed and the ECB may be able to disinflate in an orderly manner and achieve a relatively soft landing,” Bullard also noted.
