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James Bullard - Real purposes of the Fed have been achieved
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Loading...November 12, 2015. 33rd Annual Monetary Conference, „Rethinking Monetary Policy“, Washington, D.C.
James Bullard (CEO and 12th president of the Federal Reserve Bank of St. Louis):
We have, after all, been at the zero lower bound in the U.S. for seven years. In addition, the FOMC has repeatedly stressed that any policy rate increase in coming quarters and years will likely be more gradual than either the 1994 cycle or the 2004‐2006 cycle. In short, the FOMC is already committed to a very low nominal interest rate environment over the forecast horizon of two to three years.
Perhaps short‐term nominal rates will simply be low during this period, or perhaps the economy will encounter a negative shock that will propel policy back toward the zero lower bound.
Real purpose of the Fed have been achieved.
US likely entering a period of low inflation permanently.
Future negative shocks to the economy force a return to the zero interest rate policy.
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