St. Louis Fed’s Bullard Sees Rate Hike Sooner Than Expected
May 16, 2014 by Jon C. Ogg
While this is just one Fed president, it is a break from the norm and is not what the markets are expecting. In fact, Fed Funds futures at the CME website are currently projecting that there is not a 100% chance of a rate hike priced in until June of 2015. Even then, that is only a 0.25% Fed Funds Rate that is being priced in. It is not until November of 2015 that a 0.50% Fed Funds Rate is priced in with just over a 100% certainty.
Bullard also commented that the housing sector was a concern, but that growth will remain. And while the Fed is closer to its goals, it will likely require 3% GDP growth for the fed to achieve its goals. Bullard even thinks that the natural unemployment rate is now closer to the mid-5% levels.
Bullard’s comments were made in a presentation called “A Tame Taper” at the Arkansas Day with the Commissioner event hosted by the Arkansas Bankers Association on Friday.
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