St. Louis Fed President James Bullard said today in an interview on Bloomberg Radio that he expects the Federal Open Market Committee will need to begin hiking rates in the first quarter of 2015.
Bullard believes the unemployment rate will fall to around 6% by the end of this year. He also told Bloomberg Radio that asset price bubbles may become a “big concern,” but also said the Fed has better systems for flagging bubbles than it did before the housing crisis.
The St. Louis Fed president is not a voter on the FOMC this year or in 2015, but will become a voting member again in 2016 — at which point he says the federal funds rate will be at 4% or 4.25%. That likely puts him at the top of the “dot plot” contained in the FOMC’s Summary of Economic Projections that everyone has been talking about since the SEP was updated at the last FOMC meeting in late March.
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