Federal Reserve Bank of St. Louis President James Bullard said Thursday the FOMC's projected rise in the unemployment rate to 4.4% next year is just a "return to mean" for a very strong labor market.
"The U.S. labor market is super strong," he said, noting that initial jobless claims for the latest week dipped below 200,000, bucking expectations for claims to rise as interest rates head higher. The current 3.7% unemployment rate, close to 50-year lows, shouldn't be expected to last, he said. "This is probably a good time to get inflation under control while the labor market is doing so well."
"If you look at the dots, it does look like the committee is expecting a fair amount of additional moves this year. That has been digested by markets and does seem to be the right expectation," he added.
Speaking at an event in London on Wednesday, Bullard said rates will probably need to rise to 4.5%