Independent Advisor Alliance CIO Chris Zaccarelli discusses his 2022 market outlook and sector picks.
St. Louis Federal Reserve President James Bullard said Thursday that he sees an initial interest rate increase happening as soon as March as the U.S. central bank seeks to quell the hottest inflation in nearly four decades.
Speaking during a meeting of the CFA Society St. Louis, Bullard – who is serving as a voting member of the Federal Open Market Committee this year – suggested that policymakers may immediately pivot to raising rates once the Fed concludes its massive bond-buying program in March.
"The FOMC could begin increasing the policy rate as early as the March meeting in order to be in a better position to control inflation," Bullard said. "Subsequent rate increases during 2022 could be pulled forward or pushed back depending on inflation developments."
The Fed president said that policy has shifted from keeping the economy afloat during the pandemic to combating inflation.
"There was a significant unanticipated inflation shock in the U.S. during 2021," he said. "With the real economy strong but inflation well above target, U.S. monetary policy has shifted to more directly combat inflation pressure."
FED DOUBLES TAPER RATE, EYES THREE INTEREST RATE HIKES IN 2022
His comments come one day after the Fed released unexpectedly hawkish minutes from its Dec. 14-15 policy-setting meeting, revealing that most officials agreed that surging inflation and a rapidly recovering labor market could warrant a faster-than-expected interest rate hike.