The credibility of the Fed is at stake. St. Louis Fed chairman James Bullard confirms his hawkish stance and points to the strict need to tackle inflation with tighter monetary policy. “Our credibility is at stake here and we need to react to the data. However, I think we can do it in an organized and non-market-disruptive way, ”Bullard said in an interview with CNBC today. “I think we need to anticipate the planned removal of stimuli than we would have done previously. We were surprised by the rise in inflation. This is a lot of inflation, ”says Bullard.
Last week Bullard himself talked about the cost of money to be raised by 100 points between now and the beginning of July, leading the markets to price the real possibility of a 50 basis point increase, or 0.5 percentage points, at the Fed meeting of half of March.