WASHINGTON (Reuters) – St. Louis Fed President James Bullard said on Wednesday that U.S. Federal Reserve policymakers should raise the policy rate above 5% “as soon as possible” before pausing hikes in response to Ongoing outbreak
Asked at a Wall Street Journal event if he was open to another 50 basis point rate hike at the Fed’s upcoming meeting, Bullard replied: ” Why not go where we should be? …Why stagnate?”
Recent Fed forecasts show policymakers expect to raise target rates by 4.0% from current range.2023% and 4.5% to more than 5% this year, but several officials said they hoped to increase by 25 basis points at the upcoming meeting.
Fed funds futures investors expect the Federal Reserve to hold its next two-day meeting in January-February. 1.
Bullard said he thought the policy of “early-cutting” rate hikes by three-quarter and half-basis-point hikes worked well and saw no reason to stop rates ahead of policy Approaching levels seen as possible stopping points.
In the December forecasts, the official forecast was for a ‘terminal’ rate of around 5.1%.
Inflation remains higher than expected at a time when the economy is doing better than expected, “let’s get the policy rate to the right level…then we’ll see How will unfold.”
Bullard is not a voting member of the FOMC this year.