St. Louis Fed President James Bullard said yesterday that “we’re not quite there yet” to scale back the monetary stimulus. Vaccinations are bringing the economy “closer and closer” to the pre-pandemic state. “I think there will come a time when we can talk more about changing the parameters of monetary policy, I don’t think we should do it when we’re still in the pandemic,” he added.
Bullard also said, “we’ll see if the demand really flows through to a lasting increase in inflation or if this is just temporary. I think it’s mostly temporary but then some of it will flow through to inflation expectations.” He expected inflation to rise above 2% in 2021 and into 2022.
