Fed’s Bullard: ‘Unwise to Continue a Normalization Strategy’

Bullard is a complete asshole. He’s been interested in raising rates, ever since birth. For him to come out and say the Fed should cede to the market and cast away Yellen’s ridiculous normalization plans (e.g., dot plot strategy), I think it’s safe to assume the Fed will not purposely wreck the economy in March, or for the foreseeable future.

Two important pillars of the 2015 case for U.S. monetary policy normalization have changed,” Mr. Bullard said. “These data-dependent changes likely give the [Federal Open Market Committee] more leeway in its normalization program,” he said in reference to central bankers’ plans to raise rates further this year.

Mr. Bullard noted that he agrees the basic state of the economy appears sound. “U.S. growth and labor market prospects remain reasonable,” he said.

“I expect 2016 U.S. economic growth to be stronger than last year, and I expect U.S. labor markets to continue to improve. I also expect global growth to be stronger in 2016 than it was last year,” Mr. Bullard said.

But, “inflation expectations have declined too far for comfort” and “I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations,” he said.

Mr. Bullard said the Fed could change the forecasts “in a way that would cease giving such explicit guidance on the likely path of the policy rate going forward.”

According to the CME, the probability of a March Fed rate hike has plunged to just 6%. Moreover, the market is now factoring in zero rate hikes for 2016.

S&P futures are up 2.