James Bullard, Speech: Getting Ahead of U.S. Inflation

“U.S. inflation is comparable to levels seen in 1974 and 1983.”

“U.S. inflation expectations could become unmoored without credible Fed action, possibly leading to a new regime of high inflation and volatile real economic performance.”

“Modern central banks are more credible than their 1970s counterparts and use forward guidance.”

“Credible forward guidance means market interest rates have increased substantially in advance of tangible Fed action.”

“In fact, key market rates have already moved above a pre-pandemic benchmark, which may help encourage a soft landing in the U.S.”