St. Louis Federal Reserve Chairman James Bullard told reporters on Tuesday that he believed the U.S. central bank should cut $ 80 billion in monthly bond purchases. Bullard said he would support tapering from November, in order to “react to possible upside risks to inflation next year.”
The president of the Fed of Saint-Louis “pleaded to try to end with the process of reduction”
On Tuesday, Bitcoin.com News reported growing concerns about inflation as the Federal Reserve’s latest Consumer Expectations (SCE) report explained that U.S. households believe inflation will be higher in a year. It has been more than 20 months since the US central bank launched its massive quantitative easing (QE) programs to combat the dire economic consequences of government-ordered lockdowns and supply chain closures.
* BULLARD: CONCERNED THAT THE RISKS OF INFLATION ARE UPSIDE DOWN
– zerohedge (@zerohedge) October 4, 2021
The government and the Federal Reserve bailed out big companies and sent stimulus payments directly to U.S. taxpayers as unemployment skyrocketed and people couldn’t pay their bills. The US government has also ensured that landlords across the country cannot evict tenants due to a moratorium on forced evictions. On top of all these swirling problems, inflation has appeared in the wallets of every American citizen.
Currently, the US central bank is involved in the purchase of $ 80 billion in bonds and treasury bills, and $ 40 billion in mortgage-backed securities (MBS) per month. Meanwhile, on the same day as our inflation report, St. Louis Federal Reserve Chairman James Bullard discussed inflation and reduce QE in a recent interview with CNBC. “I would support the start of the cone in November,” Bullard said in his interview on the show titled “Closing bell. Bullard further pointed out:
I advocated trying to end the reduction process by the end of the first quarter of next year because I want to be able to react to any upside risks to inflation the next year as we try to get out of this pandemic.
Bullard: “I just want to be able to move out sooner”
Meanwhile, Bullard’s tapering statements follow an inquisition into stocks held by Boston Fed Chairman Eric Rosengren, Dallas Fed Chairman Robert Kaplan, and even President Jerome Powell. Bullard can probably deviate from this ethical inquisition encouraged by US Senator Elizabeth Warren as Reuter reporter Howard Schneider said the holdings of the president of the St. Louis Fed branch are modest. “James Bullard’s holdings are small enough that he handwrites his ethics form,” Schneider writes.
Bank of St. Louis Federal Reserve Pres. Jim Bullard just said #inflation might not fall back to 2% and we’re going to have more inflation than we’ve been used to for some time. This admission is a gross understatement. Soon the stagflation of the 1970s will look like the good old days!
– Peter Schiff (@PeterSchiff) October 4, 2021
When it comes to tapering, Bullard faces more hawkish Fed members who might not be okay with tapering so soon. Critic Sven Henrich of northmantrader.com does not accept all the talk of the Fed about the fact that inflation is “transient”. “Before you know it, the transient will be replaced by the new normal”, Henrich tweeted Wednesday.
“The combined assets of the Fed and Blackrock alone are equivalent to 82% of the size of the entire US economy,” Henrich said hours later in another tweet. “Add Vanguard with an additional $ 7 trillion and you get 115% of GDP. Fidelity adds an additional $ 4 trillion for a total of 134% of GDP, ”added Henrich.
Bullard explained on CNBC’s “Closing Bell” that a commitment doesn’t need to be made just yet, but he does want to be prepared. “We have no reason to engage in any way at this point,” concluded Bullard. “I just want to be able to move sooner than we can next year in the spring or summer if we have to.”
What do you think of the statements by Federal Reserve Chairman of St. Louis, James Bullard, on reducing QE? Let us know what you think of this topic in the comments section below.
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