MercoPress, en Español

Montevideo, October 3rd 2023 - 15:19 UTC



“Bellwether” Fed member says massive bond buying program could be tapered in October

Friday, September 20th 2013 - 20:29 UTC
Full article 12 comments
St. Louis Fed President James Bullard says ”October (FOMC) is a live meeting” St. Louis Fed President James Bullard says ”October (FOMC) is a live meeting”

The US Federal Reserve could still scale back its massive bond buying program at an October meeting should data point to a stronger economy, St. Louis Fed President James Bullard said on Friday. “October is a live meeting” he told Bloomberg television.

The Fed surprised markets this week when policymakers decided not to taper the 85-billion dollars-per-month bond buying program, citing worries about the health of the world's biggest economy.

“This was a close decision here in September,” Bullard said, emphasizing the role that economic data has played and will continue to play in Fed decisions. But it was possible that data would come through that again changed the discussion around US economic growth, he said, referring to the Fed meeting on Oct 29-30.

“I'm not saying it's going to happen,” Bullard said, but the possibility existed. The dollar rose to a session high against the Yen on his comments.

Some analysts see no October pullback in bond buying because there is no post-meeting news conference currently scheduled. The Fed would likely use such a news conference to detail why and how it chose to make any policy changes.

But that can always change, Bullard said. Hints the Fed is looking for an exit from its so-called quantitative easing program have sent benchmark yields soaring more than 100 basis points since May.

“Rates went up a lot over the summer,” Bullard said. “For many on the committee that was a surprise.”

The Fed also needed to make sure that it did not lose its focus on the inflation half of its dual mandate, which also cites employment.

Price pressures have been low in the United States, a potential complication for the Fed as it seeks to exit its crisis-era extraordinary measures. Very low inflation scares policymakers because it raises the chances an economic shock - say, a meltdown in Europe or China - could tip prices and wages into a downward spiral known as deflation.

In February 2011, Bullard was named in a Blooomberg article as “a bellwether person” an “indicator of where the full committee (FOMC) is heading”. Macroeconomic Advisers named Bullard the FOMC second biggest mover of markets in 2010, behind Fed Chairman Ben Bernanke.

In January 2012, Macroeconomic Advisers named Bullard the biggest mover of markets in 2011, because he “had a larger market impact than any other FOMC member. His speeches and interviews moved the two-year Treasury yield by almost 17 basis points last year.” In 2010, 2011 and 2012, Bullard appeared numerous times on CNBC, including co-hosting “Squawk Box” and “Closing Bell”, as well as on CNN, Bloomberg Television and Fox Business.

Categories: Economy, United States.

Top Comments

Disclaimer & comment rules
  • Ayayay

    They're doing better than Bush, but I'd like to see them put to rest this bond-buying spree. I don't really know what it is, but let's get more fiscally stable.

    Sep 21st, 2013 - 09:17 pm 0
  • bushpilot

    @1 Ayayay
    “They're doing better than Bush”, is a bit of a general statement.

    According to Wikipedia, “National Debt of the U.S.”;

    Under G.W. Bush the U.S. debt went from 3.4T to 6.4T in 7 years.
    An increase of 3T.
    Under B. Obama, the U.S. debt went from 6.4T to 12T in 4.5 years.
    An increase of $5.6T.

    Bush = $.4T of extra debt per year.
    Obama = $1.2T of extra debt per year.

    Obama is borrowing 3x more money than Bush did per year.

    Under Bush federal debt averaged 65% of GDP.
    Under Obama federal debt averages 90% of GDP.

    When you say, “They're doing better than Bush”. Do you mean the Obama administration is being more “fiscally stable” than the Bush administration?

    Sep 22nd, 2013 - 04:04 am 0
  • Captain Poppy

    First I want to state that both are bad for my country in their own special ways, that is....Bush and Obama. But when you tally that national debt that I carry the burden on, there is an old saying that “figures don't lie but liars figure”. Again, not to be calling you a liar, but your assignment of debt is a overly simplistic view of the issue. When you assigned the debt to Obama, did you account for the war debt at the staggering tune of 720,000,o00 a day....A DAY!!! I thank Dubya for the lie he presented to the one else.
    So yes.....Obama tallied more national burden of debt the Georgie did, primarily due to previous obligations attributed to a lie.
    For the sake of comparative purposes, remove the cost of the wars and recalculate the debt tally, what does that amount to?
    Don;t forget the unemployed.........85% of the people that lost jobs in this recession lost them between October 2008 and March of 2009, I know I was one of them “restructured”. One can hardly attribute that and the bailouts to Obama. Obama has his own special claim of incompetence and the debt and unemployed is not it.
    For the record.....US national debt 9/2001 was 5.8 trillion 9/2009-11.9 trillion. Bush budgets used the wars as ”OFF BUDGETS COSTS. National debt as 9/2012-16.06 trillion.
    Compliments of the US Treasury: I prefer this over wikipedia

    Sep 22nd, 2013 - 10:34 pm 0
Read all comments

Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!