VOT Research Desk
According to Reuters, St. Louis Federal Reserve President James Bullard stated on Thursday that the US Federal Reserve’s (Fed) monetary policy is not yet in a range considered sufficiently restrictive to lower inflation.
To date, Fed rate hikes have had just a minor impact on observed inflation. Even dovish assumptions about the stance of monetary policy justify additional rate hikes.
Monetary policy would have a lower bound of roughly 5%, compared to the current Fed target rate range of 3.75% to 4%.
If inflation falls, the range of tight policy projections could be reduced; markets anticipate disinflation in 2023. Caution is essential given that markets and the Fed have been anticipating inflation to decrease for over a year.
Before the start of the American session, the US Dollar Index was last seen up 0.8% on the day at 107.12.
