Fed's Bullard takes swipe at central bank's reaction ability
Reuters
Published Jan 16, 2015 02:32PM ET
Fed's Bullard takes swipe at central bank's reaction ability
By Tom Polansek and Michael Flaherty
(Reuters) - The Federal Reserve's policy-setting committee has failed to shift market expectations on the timing and path of an expected interest rate hike this year, a top Fed official said on Friday.
St. Louis Federal Reserve President James Bullard said the Fed's misreading of labor market strength and overestimation of inflation are among the reasons for the market's disconnect with where the Fed is headed on rates.
"Instead, market expectations for the policy rate have moved in the opposite direction, raising questions about the nature of the Committee's reaction function to incoming data," Bullard said in prepared remarks at a CFA Society event here.
Bullard, who is not a voter on the Fed's policy-setting committee this year, has long advocated for the central bank to raise interest rates sooner than the Fed was willing to move - a view not in synch with the thinking of the board of governors.
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Written By: Reuters
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