Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
The Federal Reserve's credibility is being tested by inflation and policy makers have taken "important first steps" to settle things down, though a risk of expectations becoming unstable remains, St. Louis President James Bullard said Monday.
"Inflation in the U.S. is far above target and is at levels last seen in the 1970s and early 1980s. This situation is risking the Fed’s credibility with respect to its inflation target," Bullard's slide presentation to the AXA-Barcelona School of Economics said. The remarks titled "The First Steps toward Disinflation" didn't weigh in on if another 75bp rate increase is needed at the next decision.
"U.S. inflation expectations could become unmoored without credible Fed action," he said, and "the Fed has reacted by taking important first steps to return inflation to the 2% target."
The job market is strong and the economy is seen expanding through this year, he said, comments that come as some investors debate a potential hard landing. Rising market yields also suggest investors see the Fed's policy intentions as credible, he said, adding "the Fed still has to follow through to ratify the forward guidance previously given, but the effects on the economy and on inflation are already taking hold."
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.