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What Keeps James Bullard Up at Night

Tags The Fed

05/26/2017C.Jay Engel

I hate to be the bearer of bad news before a three day weekend, but St. Louis Fed President James Bullard informs us that "U.S. prices are now 4.6 percent below the price level path established from 1995 to 2012, when inflation was growing near the Fed's target of 2 percent each year."

This lower than expected price level is deeply "worrisome," for Bullard. 

The delight that the average main-streeter feels upon observation of a store sale, or the general falling of the price of all kinds of electronic devices, is not an emotion shared by our well-educated bureaucrat monetary overlords. Instead, evidence of prices falling below their price level path expectations, is of serious concern.

Now, given the above tragedy, it appears to Bullard that the Fed's rate hike expectations are "overly aggressive." That is, in order to save the United States from the haunting specter of falling costs of living, the Fed may need to remain "accommodative," ever ready to flood more debt into the system. How original.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

Contact C.Jay Engel

C.Jay Engel is an entrepreneur who owns several businesses and lives with his wife and four children in northern California. He is an avid reader of the Austro-libertarian literature and a dedicated proponent of private property and sound money. He is the creator and editor of AustroLibertarian.com  and its associated new publication Austro Libertarian Magazine.


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