James Bullard, Speech: Financial Stress and the Economy

Speech Transcript and Q&A are not yet available. —

Speech Presentation —

Banking Crisis

“These developments have led to volatile trading in banking equities and increases in measures of financial stress.”

“Closely related measures suggest that financial conditions have become tighter.”

“However, financial stress and financial conditions metrics as of today remain low compared with levels observed during the Global Financial Crisis (GFC) of 2007-2009 or during the onset of the pandemic in March-April 2020.”

Inflation Expectations

“In part due to front-loaded Fed policy during 2022, market-based measures of inflation expectations are now relatively low.”

“According to standard macroeconomic theories, inflation expectations are a key determinant of actual inflation.”

“This bodes well for the disinflationary process in 2023.”

Monetary Policy

“Continued appropriate macroprudential policy can contain financial stress, while appropriate monetary policy can continue to put downward pressure on inflation.”