Federal Reserve Presidents Bullard & Kashkari Confirm Fed Can’t Pause Hikes

The Federal Reserve Will Continue to Adopt an Aggressive Monetary Strategy

James Bullard, president of the Federal Reserve Bank of St. Louis, reaffirmed the Federal Reserve's commitment to continuing its rapid rate rises in an exclusive interview with Kathleen Hays of Bloomberg News today. James Bullard said that it is encouraging that markets are pricing in expected interest rate rises, stressing the need for policymakers to "follow through" and put these increases into effect in order to lower the high inflation rate.

He affirmed that the Federal Reserve's objective is to bring its fed funds rate closer to 4.5% or 4.75% by saying that the Federal Reserve has continued to be surprised that inflationary pressures continue to build. A 75-basis point rate increase at the FOMC meeting in November "has been more or less priced into markets," according to Bullard. He did, however, add that he would like to wait until the meeting before deciding on the hike's preferred length.

He declined to specify whether a rate increase of 75 basis points in November would be followed by another rate increase of 75 basis points in December, stating that he didn't want to "prejudge" what he would support at the meeting in December.

James Bullard is regarded as one of the more hawkish members of the Federal Reserve. He was the first president of the Federal Reserve to openly advocate for 75 basis point rate increases. He said in the interview that the CPI core increased to 6.6% in September year over year and that this trend has persisted.

Neel Kashkari, president of the Minneapolis Federal Reserve, spoke to the Minnesota Chapter of Women Corporate Directors yesterday before his interview. He also said at a panel discussion that the Fed would continue to pursue an aggressive monetary policy, stating that "underlying" inflation cannot be stopped from growing even if the benchmark interest rate hits 4.5% to 4.75%.