Fed’s Bullard in interview with AP: Supports a 75 basis point hike at the July meeting

  • Solid US economy can handle rising rates
  • last week’s job reports points to a solid US economy with little sign of a recession on the horizon.
  • Financial markets are flashing signs that an economic downturn could arrive sometime next year
  • now we have lots of inflation, but the question is can we get inflation back to 2% without disrupting the economy
  • does not seem the US has contracted over the first two months of the year
  • Still supports a 75 basis point hike at the July meeting
  • higher rates limit the ability of consumers and businesses to borrow and spend which can cool growth and inflation, but they also carry the risk of tipping the economy into a downturn
  • other measures of the economy, such as broad measures of workers and business incomes, suggests the economy likely expanded in the 1st 6 months of this year
  • businesses added 2.7 million jobs during that time, a robust total that reflects an optimistic outlook among businesses
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