Former St. Louis Fed Chief Bullard Supports A September Rate Hike – ‘Good Time To Re-Establish Credibility On Inflation Fighting’

Bullard said the Fed has to take action to convince markets that it ‘really’ wants to get inflation back down to 2%.

• Bullard said he supports the idea of a rate hike, noting that while the latest jobs report was mixed, unemployment remains low and the broader labor market appears stable.
• He said acting now could potentially avoid a bigger problem in 2027.
• Investors will closely watch Fed Chair Kevin Warsh’s appearance at the Jackson Hole symposium, scheduled for August 27 to August 29.

Former St. Louis Federal Reserve President James Bullard said he would consider raising interest rates in September, arguing that the economy remains strong enough for policymakers to reinforce their commitment to controlling inflation.

Speaking to Bloomberg on Wednesday, Bullard said he supports the idea of a rate hike, noting that while the latest jobs report was mixed, unemployment remains low and the broader labor market appears stable.

“So, you know, why not go in September? Or if not, then at least give a signal that you might go later in the year,” Bullard said.

U.S. payrolls declined by 23,000 in July, while the unemployment rate fell to 4.1%.

Bullard Believes Fed Has To Convince Markets To Get Inflation Back Down To 2%

Bullard noted that the Fed expects core personal consumption expenditures (PCE) to remain above 3% at the end of 2026 and said the central bank has to take action to convince markets that it ‘really’ wants to get inflation back down to 2%.

“They have to take action to convince markets that they really want to get inflation back down to 2%. And Chairman Warsh has done a good job of saying that’s what he wants to do, but the market will want to see action. And, why not take action?”

Bullard said that it’s a good time for the Fed to “re-establish credibility on inflation fighting,” adding that by acting now, it could potentially “save you from a headache that you might develop for 2027.”

Investors will closely watch Fed Chair Kevin Warsh’s appearance at the Jackson Hole symposium, scheduled for August 27 to August 29. 

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, gained 0.4%; the Invesco QQQ Trust ETF (QQQ) edged marginally lower; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) rose 0.3%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘neutral’ territory.

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