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Bullard gets even more hawkish

  • One month ago saying the price level had stabilized at a low level, St. Louis Fed chief Jim Bullard now says inflation is on the rise, and the FOMC is closer to its goals than at any point in the last five years.
  • News release and presentation
  • The man who only months ago dissented from the dovish side, now says the "Fed faces a classic monetary policy challenge ... how quickly should the committee move to return monetary policy to normal." He's not a voter on the FOMC this year.
  • Ten-year Treasury yields tick a hair higher as his comments hit the wires, now up two basis points to 2.62%. There's more reaction on the short end, where June 2016 Eurodollar futures are off 5 points to 98.46, now pricing in about 125 basis points in rate hikes between now and two years from now.
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Comments (21)
  • Captain Pike
    , contributor
    Comments (701) | Send Message
     
    bullard the dullard, needs to be replaced
    9 Jun, 09:43 AM Reply Like
  • nasdaq99
    , contributor
    Comments (114) | Send Message
     
    wait till the doves slap him around. he'll flip flop within the week.
    9 Jun, 09:48 AM Reply Like
  • tom_t
    , contributor
    Comments (272) | Send Message
     
    Why are these different Fed managers allowed to spout their own opinions on the economy? Shouldn't they just SHUT UP?
    9 Jun, 09:59 AM Reply Like
  • SanDiegoNonSurfer
    , contributor
    Comments (2682) | Send Message
     
    >"Why are these different Fed managers allowed to spout their own opinions"<<

     

    It's all part of a cunning ploy to make it appear there isn't a massive conspiracy at the Fed.
    9 Jun, 11:33 AM Reply Like
  • Gary Jakacky
    , contributor
    Comments (2510) | Send Message
     
    Raising interest rates would:

     

    (1) strengthen the dollar, collapsing energy and gold prices, scaring money out of chicken little investments and into the real economy.

     

    (2) drain capital and investment out of socialist ratholes like EU

     

    (3) provide desperately needed income to savers and retirees at the deserved expense of promiscuous borrowers and other folks who don't read Shakespeare! :)

     

    (4) Ironically cause a one-off surge in investment since we now need to "beat the rate increase."
    9 Jun, 10:00 AM Reply Like
  • Deja Vu
    , contributor
    Comments (1249) | Send Message
     
    How dare you speak the truth. sir...
    9 Jun, 02:03 PM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    GARY

     

    Wake up ! Did you read that the petrodollar is dying ? Russia is now trading not converting to the US Dollar..

     

    The dollar might be put on life support within a few years.

     

    Better own some physical gold and silver.. Just sayin.
    9 Jun, 06:19 PM Reply Like
  • Captain Pike
    , contributor
    Comments (701) | Send Message
     
    Raising interest rates would;

     

    (1) collapse the economy

     

    (2) weaken the dollar because the budget deficit would balloon with interest payments causing stand-off in DC

     

    (3) low interest rates provide opportunities for stability in the markets where savers like myself and retirees can find high yielding stocks that will flourish for years

     

    I don't know if you're too young or just not bright, but just because high interest rates existed during some boom times does not lead to the conclusion that the higher they are the better things will be. Interest rates follow NOT lead. Rates are raised ONLY to cool an overheated economy from rapid inflation or rarely from truely full employment. Neither exist or will for MANY years. Oil shocks have always been the trigger for periods of rapid inflation for the last 45 years. We now have steady energy supplies that will only get better, no need to introduce a cost to the system, which would act like a brake on economic activity. High rates hurt the economy not help.

     

    Were you alive and aware during the Carter years, NO THANKS!
    10 Jun, 08:28 AM Reply Like
  • Interesting Times
    , contributor
    Comments (10911) | Send Message
     
    CAPTAIN

     

    This is a problem when misinformation is spread around and people do not do their due diligence.. See how many "likes" that comment got ? Did you really have to remind me of the Carter Admin ?

     

    Those long gas lines that followed weren't pleasant to sit on...
    10 Jun, 09:18 AM Reply Like
  • Captain Pike
    , contributor
    Comments (701) | Send Message
     
    IT, So many people just do not even know the basics or have any 1st hand knowledge of economic reality/history. The "likes" on this site are depressing, kinda like a Huffington post mentality, especially when you consider this should be a more educated crowd. No wonder the US is in the shape it's in.
    10 Jun, 12:25 PM Reply Like
  • dnorm1234
    , contributor
    Comments (942) | Send Message
     
    >Russia is now trading not converting to the US Dollar..

     

    What is the difference? They end up in the hands of someone who wants them. And there is demand.
    10 Jun, 01:50 PM Reply Like
  • leopardtrader
    , contributor
    Comments (912) | Send Message
     
    Bullard is one FED member I respect and his call is always on the money. Now he is changing his take on inflation that is a pretty good thing here. Deflation fears is now remote
    9 Jun, 10:09 AM Reply Like
  • june1234
    , contributor
    Comments (2599) | Send Message
     
    Isn't he the Fed guy who presented his "gut analysis" tool to the public once?
    9 Jun, 10:19 AM Reply Like
  • minecanary
    , contributor
    Comments (453) | Send Message
     
    Of course, anyone who proposes a return to anything near normal gets the idiot treatment around here.
    9 Jun, 11:03 AM Reply Like
  • sethmcs
    , contributor
    Comments (3228) | Send Message
     
    Normal is 4% on ten year and 6% on thirty. The losses on bonds would be huge. Instead of talking about underwater real estate we would be talking about underwater bond positions. With that said I say go for it. I have not owned any bonds in years and will not until rates normalize.
    9 Jun, 11:17 AM Reply Like
  • tom_t
    , contributor
    Comments (272) | Send Message
     
    There is no "normal" rate. The number of years where the rate was around 4% is actually quite low.
    9 Jun, 12:06 PM Reply Like
  • octane
    , contributor
    Comments (37) | Send Message
     
    "Rates are staying low for a very long time", is what Bernanke recently said with a smile, at a luncheon for the wealthy. What he wanted to add, but couldn't, was to keep buying stocks, because the only thing that matters to investors is having low rates, which they will have, and so stock market indexes are going to keep rising. Any declines will be minor and short lived. How long did small caps recently remain in correction territory? How long did the 10 year treasury yield remain at 3%, a little while back? There is absolutely nothing that will stop this phenomenon of rising stock indexes. In Sept 2008, the FED assumed absolute power and control over all financial markets. One and only one of these two events will occur in the next several years. The yield on 10 year notes will be at 5% or the Dow will be at 25,000. Which of these does the Fed want to occur? Which of these can the Fed prevent from occurring?
    9 Jun, 12:02 PM Reply Like
  • minecanary
    , contributor
    Comments (453) | Send Message
     
    The stock market rising due to low interest rates is incidental. The real gorilla is the U.S. can't afford to pay any higher interest on the debt or everything will immediately go south. The FED will probably be revealed to be the 'Belgium' buyer at some point in the future. No matter what stock market gains or debt illusions they manage to pull off in the short term, there is no way back from the debt overload the world faces w/o a complete reset.
    10 Jun, 10:01 AM Reply Like
  • octane
    , contributor
    Comments (37) | Send Message
     
    If you're referring to the Fed's "debt", it is really not debt in the usual sense. They create dollars. These dollars are placed on either the Asset or Liability side of their balance sheet. Since it's their money, it doesn't matter which side the dollars fall into.
    10 Jun, 10:55 AM Reply Like
  • minecanary
    , contributor
    Comments (453) | Send Message
     
    What matters is that the FED is using 'their' debt to buy U.S. debt...that circle jerk can only go on for so long just like the European banks buying all the sovereign debt from their countries...which those countries immediately guarantee. There is more to it then that but FED debt absolutely matters - especially since they will have massive losses (against thin capitalization) on their own bond portfolio as interest rates rise.
    11 Jun, 09:11 AM Reply Like
  • tom_t
    , contributor
    Comments (272) | Send Message
     
    And, right on cue, Boston Fed president Eric Rosengren makes a more dovish statement today. Is this some demented Fed version of good cop/bad cop?
    9 Jun, 02:21 PM Reply Like
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