St. Louis (Reuters) - The fiscal boost to the U.S. economy is likely to fade over a year or two, something that should make the Fed more cautious in continuing to raise interest rates, St. Louis Federal Reserve bank president James Bullard said on Thursday.
“That is an important thing to keep in mind,” Bullard said at an investment conference here. Fiscal policy “might have some impact right now and running through 2018, 2019. But you have to be forward-looking. The (FOMC) forecasts all have growth slowing...Should we be raising rates permanently in response to something that is only temporary?”
Reporting by Howard Schneider; Editing by Andrea Ricci