Fed’s Bullard: ‘Swift’ US response to banking stress keeps focus on inflation

US regulators’ response to the banking stress was strong and fast enough to contain the damage and allow the Federal Reserve’s interest rate policy to continue to focus on inflation, said the president of the bank in St. Louis, James Bullard.

Measures such as a new line of bank credit for the fed were approved in a wayfast and appropriate“, said bullard Friday, in a presentation prepared for delivery to the organization Greater St. Louis Inc.

“Appropriate and continued macroprudential policy can contain financial stress, while appropriate monetary policy can continue to push inflation down“, he claimed.

bullard He did not indicate in his prepared presentation whether the recent tensions in the financial sector have caused him to change his perspective on how far they would have to raise rates, or whether the Fed should continue to raise rates at each policy meeting until it is confident that the inflation is going down.

During much of the battle of the fed against inflation, Bullard has been a supporter of “pass“the hikes to reach a level”restrictive” suitable as soon as possible.

This week, the fed approved a quarter-point rise and, in a statement, noted that “could” further tightening of monetary policy may be necessary.

However, forecasts of a possible end point to the rate increases remained around 5.1%, the same as in December and a level just one more increase from the range of 4.75% to 5% approved this week.

The statement also deleted the expression “continuous uploads”. This change casts doubt on the timing and scope of the Fed’s next move as policymakers weigh the fallout from the failures of Silicon Valley Bank and Signature Bank and broader questions about the health of the banking system.