Bullard: Robust job growth supports Fed tapering 'soon'
Last week’s jobs report demonstrated the ongoing strength of the U.S. economy and underscored the need for the Federal Reserve to rein in its stimulus efforts, a Fed official said Tuesday
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Your support makes all the difference.Last week's monthly jobs report demonstrated the ongoing strength of the U.S. economy and underscored the need for the Federal Reserve to rein in its stimulus efforts, a Fed official said Tuesday.
St. Louis Federal Reserve Bank President James Bullard said that Friday's report, which showed a healthy gain of 943,000 jobs last month, means the economy is making sufficient progress to start reducing, or tapering, the Fed's $120 billion in monthly bond purchases. Those purchases are intended to lower longer-term interest rates and bolster the economy.
Bullard's comments echo other recent calls from inside and outside the Fed that the central bank should start dialing back its ultra-low interest rate policies. On Monday, Boston Federal Reserve Bank President Eric Rosengren said the tapering should begin his fall. And last week, Fed Governor Richard Clarida said the economy would likely meet the Fed's criteria for lifting interest rates by the end of 2022, an earlier timetable than the Fed's policymaking committee has projected.
Bullard sketched an aggressive timeline for tapering, which he thinks should start soon and concluded as early as next spring. That would put the Fed in a position to potentially lift its short-term interest rate from nearly zero if necessary, to keep inflation from worsening.