Further weakness in inflation could prompt the U.S. Federal Reserve to cut inter...
HONG KONG - Further weakness in inflation could prompt the U.S. Federal Reserve to cut interest rates, even if economic growth maintains its momentum, James Bullard, President of the Federal Reserve Bank of St. Louis, said on Wednesday.
The risk of the Fed missing its 2% inflation target and the trade war were two key macroeconomic challenges to the policy-setting Federal Open Market Committee , he said in a presentation prepared for an audience at the Foreign Correspondents’ Club in Hong Kong. But Bullard said on Wednesday “a downward policy rate adjustment even with relatively good real economic performance may help maintain the credibility of the FOMC’s inflation target going forward.”
Bullard and Chicago Fed’s Charles Evans, both voting members of the FOMC, have in recent days expressed concerns over the Fed’s failure to meet its target. Bullard said on Wednesday that another ‘low-side miss’ is on the horizon in 2019.
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