Economist's Insights

Bullard Said the Fed Should Stop Tightening, Risks Tipping Economy into a Recession if They Don’t

Jun 27, 2018

St. Louis Fed President Bullard (2019 voter) remains concerned that “there is a risk that we’ll go too far, too fast as a [Fed] committee.” The risk of inadvertently overtightening policy, which Bullard described in an interview with the WSJ, won’t be due to malfeasance, but rather a misunderstanding of where the equilibrium setting is for the Fed Funds rate. Bullard said the Fed should sit on their hands from here, cautioning “A misinterpretation of where we are is a distinct possibility, …That’s why I’m trying to push against faster rate hikes.”