Federal Reserve Bank of St. Louis President James Bullard, an outlier in his view that the U.S. central bank shouldn’t be raising interest rates, said the Fed should heed the signals from the bond market and dial down the urgency to be preemptive against fighting inflation.
“There is no reason to challenge the yield curve at this time,” he said in a Bloomberg Television interview with Michael McKee on Friday as the central bank’s annual policy symposium in Jackson Hole, Wyoming, gets under way. “Inflation is low, it is stable, it is barely up to target. We don’t need to be preemptive on the yield curve.”
Bullard, who votes next year on the policy-setting Federal Open Market Committee, reiterated positions that make him one of the Fed’s most dovish officials.
“I would rather not be calling rates accommodative right now,” he said. “I think we are at neutral or very close to neutral” interest rates, he said.
“It makes more sense to be gradualist in the current environment” because inflation is low and the Fed can move quickly to tamp it down if necessary, Bullard said.
Awaiting Powell
All eyes will be on remarks from Fed Chairman Jerome Powell at 10 a.m. New York time on Friday. He won’t be joined by his European Central Bank and Bank of Japan counterparts at this year’s Jackson Hole confab, with Mario Draghi and Haruhiko Kuroda’s names both missing from the list of attendees.
Other highlights from the attendee list include confirmation that none of the ECB’s executive board members will make the trip to the central-banking retreat in Wyoming’s remote Grand Teton National Park.
Policy makers gather against a backdrop of strong U.S. growth though the global economic outlook is less rosy. President Donald Trump’s trade war threatens China, while Turkey and other vulnerable emerging markets have been buffeted by financial market turmoil. Trump has also turned his ire on the Fed chief, who he picked, for raising interest rates.
Powell will be joined by both current Fed governors, Lael Brainard and Randal Quarles, as well as Fed governor nominee Marvin Goodfriend. All 11 current regional Fed presidents will be there. The San Francisco Fed has a vacancy at the top.