Economist's Insights

Bullard Believes the Fed Could Cause the Curve to Invert within Six Months

Apr 19, 2018

St. Louis Fed President Bullard showed more concern about the shape of the yield curve than the casual caution portrayed by his San Francisco counterpart a day earlier. On Wednesday, Bullard said the Fed should leave the overnight rate where it is or risk inverting the yield curve within six months. This topic, he added, deserves the Fed’s attention and discussion right now. On Tuesday, John Williams had said that an inverted curve is indeed an ominous indicator, but indicated he believes longer rates will move up and keep inversion from becoming a near-term reality. Away from the markets, Bullard’s outlook for the economy was less dire. He summarized the status of the global economy as very good and thinks continued hiring here at home will push the unemployment rate to a 3%-handle.