Fed should start faster, inflation levels “related” – Bullard by Reuters

Reuters File Photo: St. Louis Federal Reserve Bank President James Bullard speaking at a public lecture in Singapore on October 8, 2018. Reuters / Edgar Sue

(Reuters) – The current high levels of inflation cannot be eased in line with the expectations of US Federal Reserve policymakers, St. Louis Fed President James Bullard said on Thursday, as he again called on the central bank to step up its bonds. Purchase program.

“I think it’s relevant,” Bullard said at a virtual meeting of the Euro 50 group on inflation. “While I think there is some possibility that it will disappear naturally within the next six months, I would not say that this is a strong case that we can rely on.” Bullard added that he sees only a 50% chance of either way.

The Fed indicated on Wednesday that its crisis-era support for the U.S. economy could begin to wane in mid-November amid growing concerns about inflation, and said the decline in its bond-buying program would last until mid-next year.

Bullard was one of the strongest supporters of the Fed’s hasty end to its bond-buying program, which was set up at the start of the Covid-1 pandemic epidemic to stabilize financial markets and keep costs low.

He said he wanted to end the taper by the first quarter of 2022 because if it did, the central bank would raise interest rates faster than expected if inflation remained uncomfortably high.

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