FRB,Waller, Cut or Skip?

Waller, Cut or Skip?

December 2, 2024

Federal Reserve Bank of St. Louis President James Bullard said on Friday that it was too early to say whether the central bank will raise interest rates again in 2023, with a decision likely to be made at the Fed’s March meeting.

“I think we’ve done a lot of tightening,” Bullard told CNBC in an interview. “I think it’s appropriate now to kind of take stock and see how the economy performs over the next few months.”

The Fed has raised its benchmark interest rate by 425 basis points this year in an effort to combat high inflation. The central bank has signaled that it will continue to raise rates in 2023, but the pace of increases is likely to slow.

Bullard said that he is not currently forecasting a recession in 2023, but he said that it is a possibility.

“The economy is slowing down,” Bullard said. “I think we have to be aware of the risk of a recession, but I think it’s too early to say that it’s a certainty.”

The Fed’s next meeting is scheduled for March 21-22. Bullard said that he will be looking at the data on inflation and economic growth before making a decision on whether to support another rate hike.

“I’m going to be looking at the inflation data very carefully,” Bullard said. “I’m also going to be looking at the economic growth data. I think it’s appropriate to wait and see how the economy performs before we make a decision on further rate hikes.”

Bullard’s comments come after the Fed raised its benchmark interest rate by 50 basis points on Wednesday. The central bank also said that it expects to raise rates by another 75 basis points in 2023.

The Fed’s aggressive rate hikes have raised concerns about the impact on the economy. Some economists have warned that the Fed could trigger a recession if it raises rates too quickly.


Waller, Cut or Skip?

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