President James Bullard dissects the nearly six years of Zero Interest Rate Policy and asks the question: does low inflation call for an earlier return to normal interest rate policy.
Inflation, however, is currently running below the Federal Open Market Committee’s (FOMC’s) target rate of 2 percent. In addition, he cited market-based measures of inflation expectations, which declined in recent months but have reversed course. “Global factors, including low inflation in Europe and lower oil prices, may be temporarily holding inflation down in the U.S.,” he said, adding that inflation is generally projected to rise toward the FOMC’s target.
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