James Bullard, Interview: Bloomberg TV

Only a partial transcript is available. Link to the 27:50 interview is below.

“The November meeting has been more or less priced into the market at the 75 basis point number … the December meeting is a little farther away, we’ll have more data at that point.  I don’t want to prejudge exactly what I’d support at that meeting.  And then in 2023, I think we’ll be closer to the point where we can run what I would call ordinary monetary policy or a monetary policy where now you’re at the right level of the policy rate and you’re putting downward pressure on inflation, but you can adjust as the data comes in.”

“I think there’s a possibility of a good dynamic in 2023.  Let’s cross our fingers that we get it. I think that if inflation does start to decline meaningfully, we can stay where we are at this higher level of the policy rate that meets the committee’s criteria and at that point, if we could watch inflation fall and get back to 2 percent, that would be a very good dynamic, I think.”

“Inflation expectations are looking good right now, at least based on TIPS markets.  They’ve come down below 3 percent for the five year and five year forward.  Those are good numbers considering the headline number is at 8 percent. I think we do have the right expectations in markets and the right policy place.  We’re going to the right level of the policy rate and I think we can get this dynamic to work.”

“The unemployment rate is at three and a half percent.  Most people would have the natural rate of unemployment somewhere in the four percent range, let’s say 4.5 percent.  If unemployment just reverts to mean and goes to 4.5 percent, that would just be mean reversion in the labor market.  You wouldn’t expect the labor market to be at stellar levels, which is where it is compared to the post war experience.  So, you’d expect it to revert.”

https://www.bloomberg.com/news/videos/2022-10-19/fed-s-bullard-on-rate-hikes-and-inflation-fight