Bullard November.pdf

Source: St Louis Fed

Category: Federal Reserve, Think Tank

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2 Responses to “Bullard: The Tapering Debate: Data and Tools”

  1. gregheist says:

    Let’s just be honest here. There isn’t going to be any taper, at least for the foreseeable future. Economic conditions are deteriorating, consumer confidence is plummeting and the only thing propping up the market is the Fed’s seemingly endless supply of liquidity.

    Bullard is just blowing hot air to keep the masses in anticipation that MAYBE something might happen in the future….IF economic data improves (and ONLY there isn’t going to be an explosion of interest rates if they do taper).

    Taking the over/under on INCREASED QE before tapering. Your thoughts??

  2. supercorm says:

    I have to admit I find this report particularly hawckish, coming from Bullard.

    While the Fed notice a labor market improvement (we all know job creation is on the back of part time job creation on the back of full time …), Bullard doesn’t even seem to be concerned by a low inflation rate, as he usually is. The report seems to emphasis on saying that Tapering is not tightening, that they could taper while leaving a dovish forward guidance but the market have a problem disassociating the two, which create a problem for the Fed.

    With Rosengren today, it seems the Fed is starting to be concerned by the size of their portfolio, that the cost is probably outweighing benefits, but they have a problem tapering because of the immediate effect on rates (which is purely because “we”, the investors, can’t see that tapering is not tightening (which it is since they spent so much effort to convince us that LSAP was having the same impact as lowering the rates in the first place … so the inverse must be true).

    You would think they are stuck in QEnfenity … but I think they are starting to realize that you just cant keep kicking the can down the road. The can is getting huge, and USA is not Japan (ie we don’t own our debt internally …).