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Bullard Looks Through CPI Miss, Supports 75bp Hike

FED

St Louis Fed’s Bullard (’22 voter), seems to put little weight on last week’s US CPI miss, speaking for the first time since the MNI Podcast just before the CPI release:

He still sees the Fed needing to hike to 3.75-4% by year-end, but now also explicitly lends support to a third 75bp hike at the Sept FOMC. Below excerpts from WSJ headlines:

  • Inflation is too high and it’s too soon to say the inflation surge has peaked, with ways to go before the Fed gets inflation back under control.
  • Jobs markets are strong and the outlook remains bright, with it possible unemployment can tick down further.
  • Premature to worry about the economy falling into recession whilst it isn’t clear that financial conditions have actually eased as stock prices can distort some measures.

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