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James Bullard Says Fed Credibility Is On the Line, Repeats Faster Rate Hike Message

Ahead of the Fed's emergency meeting St. Louis Fed president James Bullard repeats his inflation warning.
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Image clip CNBC interview 

Image clip CNBC interview 

Credibility On the Line

In a CNBC Interview, James Bullard stressed the needs to ‘front-load’ rate hikes to combat inflation.   

Bullard Statements 

  • We have the hot CPI report. Not so much that report alone, but the last four reports taken in tandem have indicated inflation is broadening and possibly accelerating.
  • I am just one person but I would like to see 100 basis points on the policy rate by July 1.
  • "I do think 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 in the US economy. 7.5% on the headline CPI. These are numbers Alan Greenspan never saw and haven't occurred in 40 years.
  • Our credibility is on the line and we do have to react to data.
  • My position is a good one and I will try to convince my colleagues it's a good one.
  • Inflation is much higher than we would have expected six months ago, nine months ago, and certainly twelve months ago.  We've been surprised to the upside.
  • I think the inflation we are seeing is very bad for low and moderate-income households. Real wages are declining. People are unhappy. Consumer confidence is declining. This is not a good situation.

Question of the Day

Precisely what credibility does the Fed have to maintain?

For example, please note New York Fed Concludes Underlying Inflation Is Only 4.6%.

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Meanwhile, "Government in Sunshine" Emergency Fed Meeting on Monday to Discuss Inflation. 

Let's see what they have to say, if indeed anything. 

This post originated at MishTalk.Com.

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