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James Bullard: Fed can wait before new interest rate hike
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Loading...The Federal Reserve should wait on any further rate increases until it is clear inflation is reliably heading to the Fed's 2 percent target.
"Recent inflation data have surprised to the downside and call into question the idea that U.S. inflation is reliably returning toward target," Bullard said at an Illionis Bankers Association conference. "The Fed can wait and see how the economy develops before making any further adjustments to the policy rate."
The Fed raised rates at its meeting last week with only one dissenting vote. But the policy statement flagged concern over a recent fall in the Fed's preferred measure of inflation to 1.5 percent.
The central bank is also debating how to synchronize its next rate increase with its plan to begin reducing its $4.5 trillion in asset holdings, a step that at the margins could raise market interest rates.
Source: Bloomberg Pro Terminal
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