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Bullard: Fed should taper this fall, go "fairly rapidly" to end early 2022

EconomyJul 30, 2021 11:11AM ET
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© Reuters. FILE PHOTO: St. Louis Federal Reserve Bank President James Bullard speaks at a public lecture in Singapore October 8, 2018. REUTERS/Edgar Su

WASHINGTON (Reuters) - The Federal Reserve should start reducing its $120 billion in monthly bond purchases this fall and cut them "fairly rapidly" so the program ends in the first months of 2022 and paves the way for a rate increase that year if needed, St. Louis Federal Reserve president James Bullard said on Friday.

Inflation has come in faster than expected Bullard said in webcast remarks to a European economics institute, and the Fed is not currently well poised to react if needed with higher interest rates.

The Fed has said it wants to end the bond purchases before raising rates, and Bullard said the time was right to clear the way in case a rate increase is needed sooner than later.

"This is all about moving the supertanker and nudging the supertanker in the right direction at the right time," he said.

Bullard said job markets will likely have met the Fed's benchmark for a rate increase sometime next year, while the current year's high inflation offsets some of the prior weak inflation readings.

“This is a big inflationary impulse. We have to have the right risk management to contain this if we need to in 2022," Bullard said.

If inflation eases on its own, as many policymakers expect, "we have a beautiful response. Just stay at near zero policy and push out the date of liftoff. The risk management to my mind is very clear,” he said.

The Fed is currently debating when to begin to taper, or reduce, its asset purchases, with many market analysts expecting the process to start late this year or early in 2022.

Bullard: Fed should taper this fall, go "fairly rapidly" to end early 2022
 

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Comments (24)
Ronald Warren
Ronald Warren Jul 30, 2021 3:04PM ET
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Look out below!!!
Ominous Owl
Ominous Owl Jul 30, 2021 12:52PM ET
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This is the Fed double speak. I don't think they do it without such intellectual freedom. The hard talk is all they have WHICH they openly flaunt too as their weapon of releasing pressure from the bubbles so it does not pop on the face. Its a delicate gamble but they got not other tool.
Angus Malarkey
Angus Malarkey Jul 30, 2021 12:37PM ET
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Never happen.
John Avenetti
John Avenetti Jul 30, 2021 11:40AM ET
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oh you're going to raise rates on 30T in debt? whose going to pay the interest? this is baloney
Thomas Colton
Thomas Colton Jul 30, 2021 11:40AM ET
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Anyone that wants to do business with the US, which is everyone
Angus Malarkey
Angus Malarkey Jul 30, 2021 11:40AM ET
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Newsflash: The US is broke and so are most of its citizens.
John Healy
John Healy Jul 30, 2021 11:40AM ET
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Thomas Colton If the Fed raises rates then the United States government won’t be able to service the debt without massively raising taxes. It’s a lose-lose scenario. Their back is against the wall and they know it.
Ricardo Diogo
Rcd72 Jul 30, 2021 11:30AM ET
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someone in the FED is not sleeping!!!stop the nonsense now!
Mox Mox
Mox Mox Jul 30, 2021 11:26AM ET
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Things don't happen until they happen and they people wonder how did they happen
John Healy
John Healy Jul 30, 2021 11:17AM ET
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I believe Bullard would like to THINK that’s what should happen. I agree the Fed is running out of airspeed, altitude and ideas, but aggressive tapering will hobble the markets and obliterate any chances for their precious full-employment goal. It ain’t gonna happen, at least not by 2022.
William Bailey
William Bailey Jul 30, 2021 11:17AM ET
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The Fed alrwady started tapering amd Bullard knows the credit game is nearly over amd no way will republicans want to raise the debt cieling ( which we will hit this Saturday) , so credt game is done and Powell needs to stop faking the infinity *****
Benjamin McIntire
Benjamin McIntire Jul 30, 2021 11:17AM ET
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Lmao republicans print like crazy, trump wanted a weak dollar and republicans simped so please stop your nonsense
chino Choi
chino Choi Jul 30, 2021 11:15AM ET
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Bullard is right ! pop the bubble immediately.
Sevantilal Patel
Sevantilal Patel Jul 30, 2021 11:06AM ET
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Bullard really thinks they can do it? Fed is trapped and no way to go except to continue this mind crushing monetary expansion. imagine raising rate will do to federal interest payments Zambia corporations and home mortgages.
William Bailey
William Bailey Jul 30, 2021 11:06AM ET
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Bullard knows the US is out of credit
CHADWICK RICHINGTON
CHADWICK RICHINGTON Jul 30, 2021 11:03AM ET
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It doesn’t matter what he says. Jerome powell makes the decision and he will never taper
William Bailey
William Bailey Jul 30, 2021 11:03AM ET
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No more credit to create …. Its over amd Powell if faking it
Semih Unalan
Semih Unalan Jul 30, 2021 10:56AM ET
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Bullard is once again acting on his own and out of line. No respect for the chain of command, he should be sacked immediately.
Semih Unalan
Semih Unalan Jul 30, 2021 10:56AM ET
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Oh and by the way he is a traitor.
William Bailey
William Bailey Jul 30, 2021 10:56AM ET
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Bullard is correct , but because he knows Powell is bluffing and credit creation is over … in fact the treasury is nearly spent out and the debt cieling will be hit Saturday
Semih Unalan
Semih Unalan Jul 30, 2021 10:56AM ET
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William Bailey bla bla bla bla
stanley shalala
stanley shalala Jul 30, 2021 10:53AM ET
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He want the US dollar up. Because Biden ready to print more USD. A dog of Biden :D
Tutor Joseph
Tutor Joseph Jul 30, 2021 10:46AM ET
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Flattening of the curve is a cue that the bond market is projecting slower economic growth in the future.
Kelly Mayer
Kelly Mayer Jul 30, 2021 10:44AM ET
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This suggested tapering is it considering the lockdowns that will come this fall aswell, as what that will do to the economy? Because case and mortality numbers are evolving just as they did last year, which means, expect a boom of covid and variants this fall.
Tutor Joseph
Tutor Joseph Jul 30, 2021 10:41AM ET
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Fed will likely need to act much more aggressively than anticipated. It is clear what is holding the Fed back is employment. The latest economic data supports the idea that inflation is running above trend
Andrew Allen
Andrew Allen Jul 30, 2021 10:41AM ET
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welcome to six months ago
David Bradley
David Bradley Jul 30, 2021 10:31AM ET
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Sure.....if so, why wait?  #EndTheFed  Any tapering will crash the almight DOW and they know it.  This is just a talking head beating the drum of corruption.  Print, print, print, print is their ONLY option!
Alex Malmstrom
Alex Malmstrom Jul 30, 2021 10:30AM ET
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Which Monday?
jemin An
jemin An Jul 30, 2021 10:29AM ET
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I believe Republicans should not make deal Dept limit so Democrates can not easying crazy money liquidity to market. Otherwise we will facing great depression in future soon.
Andrew Allen
Andrew Allen Jul 30, 2021 10:29AM ET
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we are already facing great depression
Vicky Jena
Vicky Jena Jul 30, 2021 10:27AM ET
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Again blood bath will start
Den Sav
Den Sav Jul 30, 2021 10:15AM ET
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That's great and all. But seems like bs. The government is planning to continue crazy spending, pretty much at the same rate as 2020 and 2021. And it was the Fed financing it, who's going to do it then?
Jon Bal
Jon Bal Jul 30, 2021 10:04AM ET
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the federal poverty income level is $12,490/year so if you make more than that you're fine
Catharine Varady
Catharine Varady Jul 30, 2021 10:04AM ET
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USD Bullish
Fakhri Alisoy
Fakhri Alisoy Jul 30, 2021 10:02AM ET
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Bullard said it on monday..why are u printing this news now?why are u want to mislead people ?
Matt Brackley
Matt Brackley Jul 30, 2021 10:02AM ET
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the fact you came to that conclusion should tell you it will happen....get to tha choppa!
 
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