St. Louis Federal Reserve President James Bullard made his case for a rapid move higher in interest rates, saying Monday that the central bank needs to react to accelerating inflation.
“I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation. This is a lot of inflation,” Bullard told CNBC’s Steve Liesman during a live “Squawk Box” interview.
“Our credibility is on the line here and we do have to react to the data,” he added. “However, I do think we can do it in a way that’s organized and not disruptive to markets.”
Those comments came after Bullard rattled markets last week by saying he thinks the Fed should raise its benchmark short-term borrowing rate a full percentage point by July. The position, in a Bloomberg News interview, sent stocks on a volatile ride and caused futures markets to price in as many as seven quarter-percentage-point hikes by the end of 2022.
Along with that, markets are now tilting to a 50 basis point, or 0.5 percent point, increase at the March meeting.
“I think my position is a good one, and I’ll try to convince my colleagues that it’s a good one,” Bullard told CNBC.
Stock market futures were mildly lower Monday morning as spoke, rising from previous levels on some encouraging news out of the Russia-Ukraine hostilities.
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