Fed's Bullard: Currently supports rate increases at the March and May meetings, 50bps hike doesnt really help

St Louis Fed President James Bullard said on Tuesday that he would support a rate increase at the March meeting and would also raise rates at the May meeting if he was to make that decision today. A 50bps rate hike doesn't really help up right now, he added, saying that we are doing a lot here even though we haven't yet raised rates.  

Additional Remarks:

"Inflation is quite high right now."

"I am thinking of the March meeting and second quarter for potential rate hikes, and then getting going on balance sheet reduction."

"In July and August, we'll be able to assess how robust inflation seems for the rest of the year and adjust accordingly."

"If inflation ebbs as expected, we may not have to be as aggressive in the second half of the year."

"I think markets pricing in five hikes this year is not too bad a bet."

"I don't think inflation will moderate much before mid-year."

"I am a little pessimistic on inflation compared to the market."

"I see rest of world having more geopolitical risk than in recent years in 2022."

"China's Covid zero policy for Omicron is also a risk."

"I see strong US demand and growth at 4% for 2022."

"But that will meet with continued supply chain disruption."

"That is not too good for inflation numbers this year."

"I would like to guard against that case."

"If we take steps now, we can in the middle of the year see where we are on uncertainties."

"The Fed is data-dependent and this is a fast-moving environment."

"We don't want to disrupt markets but we also need to keep inflation under control."

"Our previous forward guidance suited a different era."

"We are going to have to be more nimble, faster, better at reacting to inflation and other developments this year."

"We are going to be more data-dependent than in the past."

"I could see real returns in the US being higher owing to our success on dealing with the pandemic."

"But it's a global marketplace and it's not nearly so clear for other countries."

"The rest of the world will drag on real rates."

"I'd like to start reducing the balance sheet in Q2."

"Runoff can be faster than last time."

"I think we can get significant balance sheet reduction pretty soon."

"The Fed is not that far from reaching neutral if you consider both rates and balance sheet together."

"If we had to, we could go above the neutral rate."

"I am confident we are not behind the curve."