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Tag Archives: James Bullard

St. Louis Fed: “0% probability that inflation will average more than 2.5% over the next 12 months”

Laura E. Jackson, Kevin L. Kliesen, and Michael T. Owyang of the St. Louis Federal Reserve have constructed a new measure they call the price pressures measure (PPM). According the authors the “PPM measures the probability that the expected inflation rate (12-month percent changes) over the next 12 months will exceed 2.5 percent”…the PPM is constructed “for both the consumer price index (CPI) and personal consumption expenditures price index (PCEPI).” This is how the PPM is constructed: In...

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Jim, it is not complicated – NGDP tells you NOT to hike

This is what St. Louis Fed president James Bullard today told CNBC: “there’s a powerful case to be made that it’s time to raise interest rates. And the case is not complicated. … Policy settings are [in] an emergency. The economy itself, the goals of the committee, have essentially been met.” Bullard goes on to talk about the labour market and talk about low oil prices is helpful for the US economy. It all very much sounds like Bullard has made up his decision BEFORE he has looked at any...

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The market’s message to Yellen: You have become too hawkish

Recently the communication from the Federal Reserve seems to have become more hawkish. It all started on July 15 when Fed chair Janet Yellen testified in front of the House Financial Services Committee. Yellen among other things said: “If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target” This has been followed by comments from other Fed officials such as St. Louis Fed president James Bullard...

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