Bullard Challenges Fed to Respond To Weakening Inflation

Thu, October 16, 2014


Bullard said the Fed should consider delaying plans to end its bond-buying program at the end of this month to halt a decline in expected inflation. The Fed has tapered purchases to $15 billion a month from $85 billion in December 2012.

...The Fed, which cut interest rates to near zero in December 2008, said last month that asset purchases would probably end after its next meeting, on Oct. 28-29, and reiterated that rates would remain on hold for a “considerable time” after the program ends.

“Ending the asset purchases has been baked in the cake for quite a while,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.

...The Fed’s concern over expectations may be muted by considering a wider range of measures, including consumer and business surveys, Crandall said.