The Story Of The Morning Is That Uber-Dove James Bullard Is Sounding Surprisingly Hawkish

James Bullard

Photo: CNBC

The markets may have expected St. Louis Fed President James Bullard — author of the paper Seven Faces Of The Peril (which sounds like the name of a Japanese horror film, perhaps intentionally) — to come on TV this morning and deliver his standard uber-dove line.But they may be disappointed by what they’re hearing.

Further QE, he says, is a tough call. The odds of a double-dip are receding, and it’s possible that the Fed won’t act until December. And though he’s still warning about deflation, and the risk of a Japanese scenario, he’s also talking about the obvious risks that come along with expanding the Fed’s balance sheet.

The purpose of this tone may be to keep the market on its toes, and keep the element of surprise on the Fed’s side, but still, markets are down and gold is selling off, so this may be having some impact.

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