Fed's Bullard calls for more 'insurance' interest-rate cuts
St. Louis Fed President James Bullard, one of the most dovish members at the Fed, made the case for further rate cuts to protect against downside risks but said the central bank will be cautious in making more rate cuts. "The FOMC may choose to provide additional accommodation going forward, but decisions will be made on a meeting-by-meeting basis," he said at an event in London.
Downside risks include the effects of magnified global trade policy uncertainty; slowing growth in the global economy; contraction in global and U.S. manufacturing; slowing U.S. business investment; and an inverted yield curve, "which seems to suggest U.S. monetary policy may be too restrictive for the current environment," he said. "Insurance rate cuts may help re-center inflation and inflation expectations at the 2% target sooner than otherwise," he added.
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