Fed's Bullard leaning toward supporting December rate hike
Reuters
Published Nov 18, 2016 07:08AM ET
Fed's Bullard leaning toward supporting December rate hike
By Balazs Koranyi
FRANKFURT (Reuters) - Federal Reserve policymaker James Bullard is leaning toward supporting an interest rate increase in December, he said on Friday, adding that a plethora of potential changes under incoming president Donald Trump could affect future policy.
St. Louis Federal Reserve President Bullard said the debate is now shifting toward the Fed's rate path in 2017 and how Trump's policies on taxes, infrastructure, spending and regulation will affect growth, productivity and ultimately Fed policy.
"Markets are currently putting a high probability on a December move by the FOMC. I’m leaning toward supporting that," Bullard, a voting member of the U.S. central bank's rate-setting committee, told a conference in Frankfurt. "I think the question now is more about 2017."
Markets now put a 90 percent chance on the Fed hiking rates by 25 basis points on Dec 14.
Bullard said some of the new administration's measures could have a significant impact on the economy in 2018 but some possible proposals to curb immigration and trade may take a decade to have a major impact.
"I see those as slow moving issues," Bullard told a panel discussion. "Trade is something that enters into negotiations, it takes many years. It can have a big impact on the economy, but it would be many years out ... ten years.
"Same with immigration. Even a successful immigration reform ... would change the composition of the labor force over time," Bullard said. "That would be something that would have possibly a big impact but over five to ten years."
Regulatory changes could have an impact in 2018-2019 and the same was true for tax reform, which could potentially spur investment and increase productivity, Bullard said, adding that he reserved judgment on any such policies until specifics become clear.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.