Former St. Louis Fed Pres. Bullard: The Fed is probably reluctant to move too much from here

Summary

Former St. Louis Fed President James Bullard discussed the US economy and Fed policy, arguing the Fed is likely reluctant to move much from current rates unless inflation falls further. He described the labor market as solid once immigration-adjusted payroll run-rates are considered, expected about 3% GDP growth this year, and highlighted productivity as a positive force. He also said the White House does not need to press for very low rates and that low nominal rates would signal economic trouble.

• Bullard said the Fed wants policy a little above neutral to keep pushing inflation down.
• He expects limited room to cut even if inflation improves in 2026.
• He views the labor market as healthy, with 4.6% unemployment near the natural rate.
• He expects around 3% US GDP growth this year, with possible upside.
• He sees productivity gains as a supportive force for the US economy.
• He warned that very low or zero nominal rates would signal something badly wrong.
• The discussion also touched on Fed chair succession and Fed reform.