ST. LOUIS May 19 The Fed's expected plans for
rate increases may be too fast for an economy that has shown
recent signs of weakness, St. Louis Federal Reserve President
James Bullard said on Friday, sketching out the case for a
continued go-slow approach.
Since the Fed raised rates in March inflation data have
dipped and so have long-term bond yields, the opposite of what
would happen if investors and the public felt the economy was
going to continue on a strong enough course to justify further
In its most recent set of projections central bank officials
said they foresaw raising rates two more times over the course
of this year, a pace Bullard said may be "overly aggressive
relative to actual incoming data on U.S. macroeconomic
"On balance, the U.S. macroeconomic data have been
relatively weak since the March...meeting," Bullard said at a
breakfast presentation to the Association for Corporate Growth.
"U.S. inflation and inflation expectations have surprised to the
downside in recent months. Labor market improvement has slowed."
The Fed is expected to raise rates at its June
policy-setting meeting, and will release fresh economic
projections at that time.
Bullard, who regards the economy as mired in a
low-inflation, low-growth rut, has said he feels the central
bank needs to raise rates only one more time, then could pause
until it is clear the economy has shifted to a higher gear.
His prepared comments did not mention whether the
controversy developing around the Trump administration could
influence the central bank if it begins weighing on business and
consumer confidence, or drags down global markets as it did
earlier in the week.
(Reporting by Howard Schneider; Editing by Chizu Nomiyama)