Further US tightening risks recession – St Louis Fed president

James Bullard

The Federal Reserve would increase the risk of recession if it carried on raising interest rates according to its current projection, the St. Louis Fed president said.

“The current level of the policy rate is about right over the forecast horizon,” James Bullard said in a speech on October 18. “Interest rates don’t have to go anywhere.”

The Fed currently projects interest rates to rise to around 3.4% by 2020. A rate that high is “quite a way into restrictive territory”, Bullard argued. Bullard

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