Former St. Louis Fed President and CEO James Bullard analyzes the latest inflation measurements and the Fed’s expected interest rate path.
The Fed’s recommended inflation measure is “stuck” in the Alan Greenspan era, according to the former St. Louis Fed president.
James Bullard, former president and CEO of the Federal Reserve Bank of St. Louis, appeared on Thursday’s “Kabuto: Coast to Coast” and discussed how personal consumption expenditures (PCE) I explained what I got and why it’s here to stay.
“In the 1990s, Alan Greenspan looked at all the ways to measure inflation, and as a result, personal consumption expenditure was seen as a broader measure of inflation, and perhaps a better indicator of the overall inflation picture. ,” Bullard said.
“And there have been no new reviews since then,” he continued.
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PCE rose again in January as the Fed continued to respond to a volatile domestic economy.
Former St. Louis Fed President and CEO James Bullard explains PCE’s reputation within the Fed.
According to the Department of Labor, consumer prices rose 0.3% from the previous month, according to the personal consumption expenditure (PCE) index. On an annual basis, prices rose by 2.4% and fell slightly from the 2.6% recorded in the previous month.
Speculation is swirling within the Fed as experts try to pinpoint when the country’s central bank will finally start cutting interest rates.
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”If you’re a member of the committee, and the economy has been picking up for a while now, and inflation seems to be coming down, perhaps not as quickly as you thought. Why do something? What if you were sitting where you are now?,” Bullard told FOX Business’ Neil Kabuto.
Bear Trap Report founder Larry McDonald is reacting to January’s PCE report and its impact on the Fed’s closely monitored interest rate decisions.
He added that as inflation declines, the Fed “needs to set interest rates lower.”
”But exactly when the committee will reach that point is something everyone is debating,” Bullard stressed.
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FOX Business’ Megan Henney contributed to this report
