Halister News

(Bloomberg) -- St. Louis Fed Pres. James Bullard’s views on monetary policy, released in paper Fri., generate debate on significance of Fed’s rate forecasts; some economists refer to Fed’s dots as absurd, confusing and frustrating; Ambrosino Brothers Senior VP Todd Colvin says Bullard has had a “come to Jesus moment.”

• Bullard came forward as the Fed official who saw just one hike in 2016, no moves in 2017-2018, and declined to give a long-run rate projection; below is reaction from economists

• Barclays (Rob Martin)
  • Bullard’s view won’t be enough to pull rest of FOMC
  • Paper released Fri. by Bullard suggests “there’s a lot of uncertainty”
  • He’s “still trying to find his way forward”
  • Story link

• FTN (Chris Low)
  • Rest of FOMC “will gravitate toward Bullard if history is any guide”
  • Dots have fallen steadily since they were first published
  • Story link

• Jefferies (Thomas Simons)
  • Bullard opens debate on dots; that isn’t a “bad idea”
  • Dots creating “a lot more confusion and frustration than effective communication would”
  • Story link

• Northern Trust (Carl Tannenbaum)
  • Bullard’s position is “outlier,” shouldn’t impact mainstream view at Fed
  • Hard to figure out what led to such shift
  • Bullard’s new approach to forecasts represents “significant” reevaluation of how monetary policy ought to react to economic activity
  • Story link

• RBC (Tom Porcelli, Jacob Oubina, Michael Cloherty)
  • Bullard’s statement is testament to “absurdity” of Fed’s dots, and “protest” against using them as a policy tool
  • “In that regard, we could not agree more”
  • Story link

• TD (Millan Mulraine)
  • Bullard’s view reflects greater acceptance at Fed of U.S. economy’s structural headwinds
  • He made “fairly cogent” argument; U.S. economy may be stuck in “some variation of secular stagnation” and a “bad equilibrium”
  • Story link