In a speech to the Union League of Chicago, James Bullard made Remarks on the Current Stance of U.S. Monetary Policy.
Bullard noted that the U.S. economy is expected to grow more slowly going forward, with some risk that the slowdown could be sharper than expected due to ongoing global trade regime uncertainty.
“In addition, both inflation and inflation expectations remain below target, and signals from the Treasury yield curve seem to suggest that the current policy rate setting is inappropriately high,” he said.
Bullard concluded: “A downward policy rate adjustment may be warranted soon to help re-center inflation and inflation expectations at target and also to provide some insurance in case of a sharper-than-expected slowdown.”
These group-think economic illiterates do not understand inflation one bit.
They blow asset bubbles, which they do not count as inflation, then when the bond market signal asset prices are on the verge of collapse, they get concerned.
Inflation isn’t too low, asset bubbles are too big.
The bond market message is simple: Don’t blow asset bubbles unless you want another round of destructive asset deflation. For the third time since 2000, the Fed missed the message.
The Fed does not even see the current bubbles and won’t until they break hard.
Mike “Mish” Shedlock