11-06-2024
The Federal Reserve is on track to look through noisy data and continue toward a policy rate decrease of 25 basis points at its meeting this week, says Jim Bullard, Dr. Samuel R. Allen Dean of the Mitch Daniels School of Business.
“I think the committee is in pretty good shape to continue on this path to try to get inflation all the way down to 2 percent,” Bullard said on Yahoo Finance during a live interview November 1.
Data has been mixed, affected by hurricanes and strikes, he notes. But the Fed does its best to “extract the signal from the noise” and also can look at other economic indicators such as GDP and the labor market.
“It doesn’t really look like we’re on the cusp of any kind of recession,” Bullard says, adding that the labor market is still doing relatively well.
The FOMC meets November 6-7 and is set to announce its interest rate decision at 2 p.m. Eastern on Thursday. This will be followed by a press conference with Fed Chair Jerome Powell at 2:30 p.m.
Bullard cautions that we don’t know what kind of shocks will hit the U.S. economy in 2025.
“It’s probably a bit of an illusion that the fog will ever go away. There’s always quite a bit of uncertainty in this world.”
Bullard is a former long-time Federal Open Market Committee (FOMC) member. In his 15 years as the sitting president and chief executive officer of the Federal Reserve Bank of St. Louis, he earned praise for his leadership and innovative thinking as part of the FOMC in guiding the direction of U.S. monetary policy. He is now able to comment on the FOMC, a 12-member board that holds eight regularly scheduled meetings each year. At these meetings, the committee reviews economic and financial conditions, determines the appropriate stance of monetary policy, and assesses the risks to its long-run goals of price stability and sustainable economic growth.
Bullard spoke with the Financial Times (subscription required) ahead of the FOMC meeting, as well as Agence France-Presse for a story set to be published Thursday morning.
