Fed’s Bullard Offers Checklist Supporting Rate Hike – NMP Skip to main content

Fed’s Bullard Offers Checklist Supporting Rate Hike

Phil Hall
Nov 20, 2015
St. Louis Federal Reserve Chairman James Bullard has issued a bold argument that all but insists the time is right for the nation’s central bank to raise interest rates

St. Louis Federal Reserve Chairman James Bullard has issued a bold argument that all but insists the time is right for the nation’s central bank to raise interest rates.

Speaking today before a business group in Arkansas, Bullard presented five questions that he said needed to be answered affirmatively before the Federal Open Market Committee (FOMC) can agree to a rate hike.

The first question was aimed at China’s economy, which experienced a level of tumult this summer that resonated across the globe. But Bullard suggested this is not a crisis any longer.

“The probability of a hard landing in China is no higher today than it was earlier this year,” Bullard concluded.

The second question considered U.S. financial market stress indicators, which he brushed aside as no longer a threat.

“The St. Louis Fed Financial Stress Index does not show particularly high levels of stress currently,” Bullard said. “Financial stress today in the U.S. is not particularly high compared with the last five years.”

The third question focused on the U.S. labor markets, which he did not view with alarm.

“The unemployment rate, at five percent in October, is within the Committee’s central tendency of the estimate of the longer-run rate,” he said. “U.S. labor markets have largely normalized.”

The fourth question detailed inflation following the stabilizing of oil prices, in which he expressed confidence.

“Oil price stabilization likely implies headline inflation will return to two percent in the U.S.,” Bullard predicted.

The fifth question took on the strength of the U.S. dollar against other currencies. He noted that since “foreign exchange markets are forward-looking and foresee most or all systematic movements in economies, including predictable policy movements.” While acknowledging the possibility of unpredictable occurrences in the future, he felt confident that “global policy divergence has already been priced into foreign exchange valuations.”

As for the FOMC itself, Bullard was already looking beyond the anticipated rate hike for a new operating procedure for setting monetary policy. In comments to reporters following his speech, Bullard predicted a “return to an era where there is a bit more uncertainty about what the Committee is going to do meeting to meeting. I would welcome the return of that because, to me, that's normal monetary policy.”

Nov 20, 2015
Manufactured Housing: The New Affordable Alternative

While the housing market is grappling with widespread affordability and supply, manufactured homes are gaining ground as a new alternative. 

Industry News
Dec 03, 2021
Angel Oak Home Loans Opens 3 New Branches

Continues expansion in Western U.S. with new branches in California, Nevada & Utah.

Industry News
Dec 02, 2021
Open Mortgage Names New President

Joe Stephenson, formerly of American Advisors Group, to lead daily operations.

Industry News
Dec 01, 2021
Homepoint Expands Refinance Program Offerings

Now offers Freddie Mac’s new refinance option, Refi Possible, making it easier for many homeowners with a Freddie Mac-owned mortgage to reduce their interest rate.

Industry News
Nov 30, 2021
Non-QM Lender Deephaven Hires Business Development VP

Dallas-based Tim Fisher charged with growing Deephaven’s correspondent business In Texas and surrounding states

Industry News
Nov 30, 2021
Biden Reappoints Powell As Federal Reserve Chairman

A signal that The Fed will continue its policies as inflation surges and economic uncertainty spikes due to an emerging variant of the coronavirus. 

Industry News
Nov 29, 2021