Home > Fed News, US > Bullard Comments on Monetary Policy, Indicating a Fed Rate Hike Not Likely Over the Short-Run

Bullard Comments on Monetary Policy, Indicating a Fed Rate Hike Not Likely Over the Short-Run

February 8th, 2010 Michael McDonough

According to CNBC, James Bullard,President Federal Reserve Bank of St. Louis, indicated in an interview today that *he does not believe the Fed will begin hiking interest rates, until after they start selling off some assets. He anticipates that the Fed could begin selling assets during the second half of this year. Bullard had this to say on asset sales, “Maybe you get in the second half of 2010 or something like that, if things are going pretty well, maybe then you’d sell a little bit at that point and you’d try to see how the market reacts.”

In investors’ minds Bullard’s comments will likely reduce the probability of a near-term rate hike, and also help define the parameters for future hikes.  I presently do not anticipate that we will see a Fed rate hike until November 2010 at the absolute earliest.

*I heard this reported on CNBC, but have not yet found the quote to support this statement.

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