Former Fed president Bullard is bullish on rate cuts

James Bullard says CPI data supports September easing.

Former Federal Reserve Bank of St. Louis President James Bullard said he expects the pace of US monetary policy easing to be slow, although the latest inflation print sparks hope for a September interest-rate cut.

The pace of cuts will be slow because there is no sense of urgency in the real economy, Bullard said Friday in virtual remarks at a UBS Group AG event in Singapore. Still, the latest inflation report has brought September back into play, he added.

Although Fed officials’ projections showed only one cut in 2024, the market is pricing in two quarter-point rate reductions this year, in November and December. Bullard recently changed his view to two rate cuts from the three he had envisioned in April as inflation moved toward the central bank’s target and the economy remained resilient.

Bullard, who is currently dean of Purdue University’s business school, said the US growth outlook remains robust, even as he ruled out the chance of a hike later this year.

“If they want hawkish policy, they can keep rates at where they are. They can delay easing,” he said, projecting US 10-year Treasury yields to stay in the mid-4% range through 2025.