Bullard: The “probably not” man at the FOMC

Questions for U.S. monetary policy

  • Is U.S. economic growth poised for a rebound in the second half of 2017, as compared to the first half?
  • Is the downside inflation surprise in the first half of 2017 likely to reverse in the second half of 2017?
  • Will continued strong performance of U.S. labor markets put upward pressure on inflation? •

The answer to all these questions:

Probably not.”

And concludes:

  • Recent data indicate that U.S. real GDP growth remains consistent with the low-growth regime of recent years.
  • U.S. inflation has surprised to the downside in recent months, and the surprise is unlikely to reverse during 2017.
  • Low unemployment readings are probably not an indicator of meaningfully higher inflation over the forecast horizon.
  • The current level of the policy rate is appropriate given current macroeconomic data.

He does much better than many of his peers, especially his boss Yellen.


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