St. Louis Fed's Bullard supports 75-bp rate hike, bringing rate to neutral in July

Jul. 14, 2022 1:48 PM ETBy: Liz Kiesche, SA News Editor16 Comments

  • St. Louis Fed President James Bullard said Thursday he favors a 75-basis-point rate increase at the Federal Reserve's July meeting, a move that will get the federal funds rate to the long-term neutral level.
  • "If we made this move at this meeting, that would get us all the way till the long run neutral value. And obviously we've got more steps to take in meetings ahead, but we can assess as we go through the rest of this year," he said in an interview with Nikkei.
  • The neutral rate is the point at which the Fed's key lending rate would neither stimulate nor hinder demand. In June, the Federal Open Market Committee hiked the federal funds rate target range by 75 bps to 1.50%-1.75%.
  • "I've said it would be a good idea to get to 3.5% this year, and that would put downward pressure on inflation. A lot of that's already been priced into the markets, so we've already got the market pricing we need," Bullard said.
  • Earlier, Fed Governor Christopher Waller said he supports a 75-bp hike, or more if demand doesn't slow

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