NEW YORK (Reuters) – A U.S. interest rate cut could lift people’s expectations for inflation and reset bond prices, St. Louis Federal Reserve President James Bullard said on Friday.
“Signals were that we were highly likely to ease at the July meeting – so now that’s all been priced into the market – so if you try to take that out I think it would be very difficult at this stage,” Bullard told reporters. “So you might as well follow through and ratify that and then see how the economy develops going forward.”
Worse outcomes in U.S. trade negotiations or a poor response by inflation could create reasons to ease policy further, he said.
The Fed’s policymaking committee next meets on July 30-31.
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